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The New York Stock Exchange (NYSE).
Photographer: Michael Nagle / Bloomberg
Photographer: Michael Nagle / Bloomberg
The New York Stock Exchange said it will delist three Chinese corporations to comply with a U.S. executive order imposing restrictions on companies identified as affiliated with the Chinese military.
China Mobile Ltd., China Telecom Corp Ltd., China Unicom Hong Kong Ltd will be suspended from trading between January 7 and 11, and procedures to remove them from the list have started, according to a statement from the exchange.
The three companies are listed separately in Hong Kong. They all generate all of their revenue in China and don’t have a significant presence in the US, except for their listings there.
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.
China’s Foreign Ministry later accused the United States of “brutally slandering” its military-civil integration policies and promised to protect the country’s companies. Chinese officials have also threatened to respond to previous actions by the Trump administration with their own blacklist of American companies.
The executive order has resulted in the removal of a number of companies from Indices compiled by MSCI Inc., S&P Dow Jones Global Indices and FTSE Russell.
Global exchanges, including the NYSE and Nasdaq Inc., courted Chinese companies for the past decade as they tried to expand their IPO business, particularly in the internet sector. In response, Hong Kong Exchanges & Clearing Ltd. changed its rules in recent years to lure back listings, including allowing the sale of shares by companies with weighted voting rights, strengthening the power of company founders at the expense of weaker protections for minority investors.
Companies that include e-commerce giants Alibaba Group Holding Ltd. and JD.Com Inc., which were already listed in New York, held secondary listings in Hong Kong in the past two years as the trade war between the United States and China intensified.
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