NYSE deletes the list of the top telecommunications companies in China

NYSE said at the latest that it would suspend trading in securities issued by China Mobile, China Telecom Corp.

NO -0.04%

, and China Unicom Hong Kong Ltd.

CHU -1.56%

at 4 a.m. on January 11. It will trade four days earlier if it does not receive confirmation from the Depository Trust & Clearing Corp. that the clearinghouse will settle trades made on January 7 and January 8.

NYSE said it would also cease trading in closed-end funds and exchange-traded products listed on the NYSE Arca stock exchange if they hold banned stocks.

On Friday, China Unicom said it will release a statement in due course. China Mobile and China Telecom did not immediately respond to requests for comment.

An executive order signed by President Trump in November will prevent Americans from investing in a list of companies that, according to the US government, provide and support China’s military, intelligence and security services. The ban will begin on January 11, and investors have until November to divest their assets.

The list currently includes 35 companies – including China’s largest chip maker – as well as surveillance, aerospace, shipbuilding, construction and technology companies.

It was not initially clear whether the order included both subsidiaries and parent companies, and US government leaders clashed over how broad the blacklist should be, The Wall Street Journal reported in December.

This week, however, the Treasury Department said it would add subsidiaries to the blacklist if they were majority-owned – or controlled by a named company. The Treasury’s Office of Foreign Assets Control, which handles economic sanctions, also said the ban related to derivatives and depository receipts, as well as exchange-traded funds, index funds and mutual funds.

Last month, index compilers including MSCI Inc.,

FTSE Russell and S&P Dow Jones Indices said they would remove some Chinese stocks from their benchmarks because of the order, although they did not exclude stocks issued by subsidiaries and affiliates.

China Mobile, which has a market value of approximately $ 117 billion, was not on the original blacklist, although its parent company, China Mobile Communications Group, was. Its US stock is barely traded compared to its Hong Kong securities, data from FactSet shows. On average, about 2.1 million US depository receipts were traded in the past three months, compared to 34 million Hong Kong shares per day. Each ADR is equal to five Hong Kong common shares.

Other US initiatives could also lead to further delisting. Last month, Mr. Trump signed legislation allowing Chinese companies to be kicked out of the US markets if US regulators are unable to inspect their audits within three years. Some Chinese companies, including Alibaba Group Holding Ltd.

and JD.com Inc.,

have already gained secondary listings in Hong Kong, which could mitigate the impact of such a move.

Write to Chong Koh Ping at [email protected]