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Photographer: Frederic J. Brown / AFP / Getty Images
Photographer: Frederic J. Brown / AFP / Getty Images
Chinese oil majors may be next on the US list after the New York Stock Exchange said last week that it would eliminate the three largest telecommunications companies in the Asian country.
China’s largest offshore oil producer CNOOC Ltd. could be at higher risk as it is in the The Pentagon’s list of companies it says are owned or controlled by the Chinese military, according to Bloomberg Intelligence analyst Henik Fung. PetroChina Co. Ltd. and China Petroleum and Chemical Corp., also known as Sinopec, may also be under threat, as the energy sector is crucial for China’s military, he said.
“More Chinese companies could be delisted from the US and Big Oil could arrive as the next wave,” said Steven Leung, chief executive of UOB Kay Hian in Hong Kong. At the same time, the impact of eliminating telcos is likely minimal, as they were sparsely traded in the United States and hadn’t raised much money there, he said.
The NYSE said it would delist telecoms operators to comply with a US executive order imposing restrictions on companies identified as affiliated with the Chinese military. China Mobile Ltd., China Telecom Corp Ltd. and Trading in China Unicom Hong Kong Ltd. would be suspended between January 7 and 11, and procedures to remove them from the list have started, the exchange said.
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China’s Commerce Ministry responded on Saturday saying that the country would take the necessary steps to protect the rights of Chinese companies and hoped the two countries could work together to create a fair and predictable environment for companies and investors.
The China Securities Regulatory Commission said on Sunday that given its small number of shares traded in the United States, the impact on telecommunications companies would be limited and that they are well positioned to handle any consequences of the delisting.
“The recent move by some political forces in the United States to continually and baselessly suppress foreign companies that are listed on US markets, even at the cost of undermining their own position in global capital markets, has shown that the rules and US institutions can become arbitrary, reckless and unpredictable, ”the CSRC said in a statement on its website.
US President Donald Trump signed an order in November banning US investments in Chinese companies owned or controlled by the military in an attempt to pressure Beijing for what he considers abusive business practices. The order prohibited US investors from buying and selling shares in a list of Chinese companies. designated by the Pentagon for having military ties.
Subsequently, the Chinese Foreign Ministry accused the United States of “brutally defaming” its policies of military-civil integration and promised to protect the country’s companies. Chinese officials also He threatened to respond to previous actions by the Trump administration with his own blacklist of American companies.
– With the help of Max Zimmerman and Gregor Stuart Hunter
(Updates with CSRC statement in sixth and seventh paragraphs)
