The New York Stock Exchange has begun delisting of the securities of three Chinese telecom companies after President Trump last month banned US investments in Chinese companies that Washington says are owned or controlled by the military.
The move by the NYSE, which will limit access for US investors, follows global index providers MSCI, S&P Dow Jones Indices and FTSE Russell and Nasdaq, dropping several Chinese companies from their indexes.
It’s “a modest step, but at least an awareness of national security and human rights risks,” said Roger Robinson, a former White House official who is restricting Chinese access to US investors.
NYSE said the issuers, China Telecom Corporation Limited, China Mobile Limited and China Unicom (Hong Kong) Limited, were no longer suitable for listing as the injunction prohibits all transactions in securities “ designed to provide investment exposure to such securities, ” of any communist Chinese military company, by a person from the United States. “
Trump’s November decision affects some of China’s largest companies.
The order was intended to sink teeth into a 1999 law requiring the Ministry of Defense to compile a list of Chinese military companies. The Pentagon, which only fulfilled the mandate this year, has appointed 35 companies so far, including oil company CNOOC and China’s top chip maker, Semiconductor Manufacturing International.
China has condemned that ban, and fund managers have said it could benefit non-US investors who can pick up the shares.
NYSE said it would suspend trading in the stock on Jan. 7 or Jan. 11. The issuers are entitled to a review of the decision. Each of the telecom companies listed by the NYSE is also listed in Hong Kong.
China Telecom has also come under fire from the Federal Communications Commission, which said earlier in December that it had begun revoking the company’s license to operate in the United States.
The companies were not available for comment on a public holiday in China.
The ties between Washington and Beijing have become increasingly antagonistic over the past year as the world’s two largest economies discussed Beijing’s handling of the coronavirus outbreak, the imposition of a national security law in Hong Kong and mounting tensions in the South. -Chinese Sea.
Separately, President Trump signed a law last month that would kick Chinese companies off the US stock markets unless they adhere to US auditing standards. Market participants said this would add to the rush of US-listed Chinese companies to back up Hong Kong listings.