NYSE to Delist China's Major Telecommunications Operators
01 Janvier 2021 - 12:29PM
Dow Jones News
By Chong Koh Ping
The New York Stock Exchange will delist China's three large
telecommunication carriers, following a U.S. government order
barring Americans from investing in firms it says help the Chinese
military.
This will result in China Mobile Ltd.--which is among the most
valuable of China's listed state-owned enterprises--being kicked
off the Big Board after more than two decades, following the
privatization of its predecessor in 1997.
NYSE said, at the latest, that it would suspend trading in
securities issued by China Mobile, China Telecom Corp., and China
Unicom Hong Kong Ltd. at 4 a.m. on Jan. 11. It will act four days
sooner if it doesn't get confirmation from the Depository Trust
& Clearing Corp. that the clearinghouse will settle trades made
on Jan. 7 and Jan. 8.
NYSE said it would also halt trading in closed-end funds and in
exchange-traded products listed on its NYSE Arca exchange if they
hold banned stocks.
On Friday, China Unicom said it will release a statement in due
course. China Mobile and China Telecom didn't immediately respond
to requests for comment.
An executive order signed by President Trump in November will
block Americans from investing in a list of companies the U.S.
government says supply and support China's military, intelligence
and security services. The ban starts on Jan. 11 and investors have
until November to divest their holdings.
The list currently includes 35 companies--including China's
largest chip maker--as well as surveillance, aerospace,
shipbuilding, construction and technology companies.
It wasn't initially clear if the order covered subsidiaries as
well as parent companies and U.S. government leaders clashed over
how broad the blacklist should be, The Wall Street Journal reported
in December.
However, this week, the Treasury Department said it would add
subsidiaries to the blacklist if they were majority owned--or
controlled--by a company that has been named. The Treasury's Office
of Foreign Assets Control, which handles economic sanctions, also
said the ban covered derivatives and depositary 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, though they
didn't exclude shares issued by subsidiaries and affiliates.
China Mobile, which has a market value of about $117 billion,
wasn't included on the original blacklist though its parent, China
Mobile Communications Group, was. Its U.S. stock is thinly traded
compared with its Hong Kong securities, FactSet data shows. About
2.1 million American depositary receipts traded daily on average
over the last three months, compared with 34 million Hong Kong
shares a day. Each ADR is equivalent to five ordinary shares in
Hong Kong.
Other U.S. initiatives could also bring more delistings. Last
month, Mr. Trump signed legislation that could have Chinese
companies kicked off U.S. markets if American regulators can't
inspect their audits within three years. Some Chinese companies,
including Alibaba Group Holding Ltd. and JD.com Inc., have already
obtained secondary listings in Hong Kong, which could help blunt
the impact of such an action.
Write to Chong Koh Ping at chong.kohping@wsj.com
(END) Dow Jones Newswires
January 01, 2021 06:14 ET (11:14 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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