America v China Inc – NYSE boots out Chinese telecoms firms—then it doesn’t, then does | Business


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S&P Dow Jones to remove ADRs of Chinese telecom companies after NYSE decision



FILE PHOTO: 5G active antenna units with logos of China Mobile and Huawei are seen in front of a National People’s Congress (NPC) conference center in Luoyang, Henan province, China February 27, 2019. REUTERS/Stringer

January 8, 2021

By Kanishka Singh and Bhargav Acharya

(Reuters) – S&P Dow Jones Indices said on Wednesday it will remove the American Depositary Receipts of three Chinese telecom companies, China Mobile Ltd, China Telecom Corporation Ltd and China Unicom (Hong Kong) Ltd, from its benchmarks.

“S&P DJI’s announcement to move forward with removing the above-referenced ADRs from its indices is due to the New York Stock Exchange’s (NYSE’s) latest confirmation that the ADRs will be delisted,” it said in an emailed statement.

The NYSE said on Wednesday it will delist the three Chinese companies effective Jan. 11, confirming its latest reversal on the matter a day after U.S. Treasury Secretary Steve Mnuchin told the NYSE chief he disagreed with an earlier decision to reverse the delistings.

The flip-flopping highlights the confusion over which firms were included in an executive order issued by President Donald Trump in November barring U.S. persons from investing in publicly traded companies Washington deems to be tied to the Chinese military.

Investors had sold positions in the securities after the NYSE first announced plans last week to delist China Mobile, China Telecom and China Unicom. But the shares rose after NYSE said it would not do so and tumbled again after the latest about-face.

Less than 24 hours before its latest announcement, S&P Dow Jones Indices too had said it would not remove the ADRs of the firms, in line with NYSE’s decision at the time.

Hong Kong shares of China Unicom led losses among the three China telecom stocks to be delisted by NYSE at the start of trading in Asia, down as much as 9.4%.

China Mobile shares were down as much as 6.8%, and China Telecom Corp shares dropped 5.8%.

(Reporting by Kanishka Singh and Bhargav Acharya in Bengaluru; Editing by Himani Sarkar)



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Why NYSE decided to delist 3 Chinese companies after 2 U-turns in 2 days




Why NYSE decided to delist 3 Chinese companies after 2 U-turns in 2 days | Fortune

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NYSE to delist three Chinese telecoms in dizzying about-face


NEW YORK: The New York Stock Exchange said on Wednesday (Jan 6) it will delist three Chinese telecom companies, confirming its latest U-turn on the matter a day after US Treasury Secretary Steve Mnuchin told the NYSE chief he disagreed with an earlier decision to reverse the delistings.

The latest move, which is effective Jan 11, marks the third time in less than a week the Big Board has ruled on the issue.

The flip-flopping highlights the confusion over which firms were included in an executive order issued by President Donald Trump in November barring US persons from investing in publicly traded companies Washington deems to be tied to the Chinese military.

It also comes amid escalating tensions within Washington on China policy in the final days of the Trump administration.

“There is a unique situation where there is an outgoing administration that is disengaged and (there are) orders sitting out there, so something has to be done, but no one wants to take on responsibility,” said Leland Miller, the CEO of the US-based consultancy China Beige Book.

“I think in future that anyone getting these orders will say: ‘Tell us exactly what you want us to do,’ and force administrations to be more focused.”

READ: US considering adding Alibaba, Tencent to China stock ban: Sources

The NYSE originally on Thursday announced plans to delist China Mobile, China Telecom Corp and China Unicom Hong Kong. On Monday, it did a U-turn after consulting with regulators in connection with the US Treasury’s Office of Foreign Assets Control and decided to keep them listed. Wednesday’s decision marks a return to the original plan.

The decision to keep the companies listed had prompted criticism that Treasury was being dovish on China.

Mnuchin has long been seen as seeking to thwart attempts by hardliners in the administration – many led by the State department – to crack down on Chinese companies.

But sources who asked to remain anonymous due to the sensitivity of the matter said Mnuchin had called NYSE President Stacey Cunningham on Tuesday to express his concerns over the decision to relist the companies, as the exchange sought further confirmation on the matter.

“The Treasury secretary was on the phone with the NYSE (president) now and was told that NYSE would reverse their decision,” a US official told Reuters on Tuesday.

INVESTOR COMPLIANCE URGED

On Wednesday the exchange operator said in a statement its latest decision, to move forward with the delistings, was based on “new specific guidance received on Jan 5, 2021, that the Department of Treasury’s Office of Foreign Assets Control provided to the NYSE”.

Trading in the securities will be suspended at 4am ET on Jan 11, the NYSE said.

A spokeswoman for the exchange operator declined to comment further.

The flip-flopping caused investors to sell positions in the securities, the prices of which dropped on the initial announcement, then rose on the next, and tumbled again on Wednesday.

Republican Senator Ben Sasse, a member of the Senate Select Committee on Intelligence, said the decision was the “right call”.

“Chinese firms that reject fundamental transparency requirements and have ties to the Chinese military shouldn’t benefit from American investment,” Sasse said.

Trump’s executive order technically takes effect on Jan 11 but does not ban purchases by US investors until November.

While the directive stops short of forcing a delisting, a separate bill signed into law by Trump in November will kick Chinese companies off US bourses if they do not fully comply with the country’s auditing rules in three years.

The US State Department plans to release as soon as Wednesday a fact sheet urging US investors to comply with the executive order, according to three people familiar with the matter and a copy of the document seen by Reuters.

The Treasury said on Wednesday that market intermediaries could help investors divest securities of the blacklisted companies.

S&P Dow Jones Indices, which has also made U-turns in decisions, said late on Wednesday it will remove the three telecom firms’ ADRs from its benchmarks before Jan 11.

Other index makers including FTSE Russell and MSCI Inc have cut a dozen Chinese companies on the list from their benchmarks, but have not removed the three telecom firms, all of which have major passive US funds amongst their top shareholders.

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America v China Inc – NYSE boots out Chinese telecoms firms—then doesn’t, then does | Business


A pall of uncertainty hangs over Chinese shares in America


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NYSE does a U-turn on Chinese telecoms delistings


Wall Street to kick out Chinese telecom giants

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NYSE reverses course, says it won’t delist 3 Chinese telecoms


In a major reversal, the New York Stock Exchange said it no longer intends to delist three Chinese telecom companies that had been targeted by an executive order from President Donald Trump.

In a statement late Monday, the NYSE took back its intent to delist China Mobile Ltd. 
CHL,
-5.89%,
 China Telecom Corp. Ltd. 
CHA,
-5.48%
and China Unicom (Hong Kong) Ltd.
CHU,
-3.17%
 , which it had announced late on New Year’s Eve.

American depository receipts of all three companies had fallen sharply in Monday trading. All three companies are also listed in Hong Kong, where shares of China Mobile
941,
+5.47%,
China Telecom
728,
+5.74%
and China Unicom
762,
+6.71%
shot up in Tuesday trading after the announcement.

The NYSE said the reversal comes “in light of further consultation with relevant regulatory authorities.”

The exchange, which is owned by Intercontinental Exchange Inc.
ICE,
-1.73%,
did not further explain its decision, other than to say: “At this time, the Issuers will continue to be listed and traded on the NYSE. NYSE Regulation will continue to evaluate the applicability of Executive Order 13959 to these Issuers and their continued listing status.”

Trading in the companies was to have been suspended as soon as Jan. 7.

The delisting announcement last week came in compliance with an executive order by President Donald Trump banning Americans from investing in a handful of Chinese companies that the U.S. claim support or supply the Chinese military.

China had accused the U.S. of “viciously slandering” the companies, and had threatened to retaliate.

The executive order may become a moot point in another two weeks, once Trump leaves office, if incoming President Joe Biden overturns it. The order is set to take effect Jan. 11, a little more than a week before Biden’s inauguration.

The three companies dominate China’s mobile business. China Mobile is China’s largest telecom company, and has a market cap of about $116 billion. It has been listed on the NYSE since its blockbuster, $4.2 billion IPO in 1997. China Telecom has been listed on the NYSE since 2002, and has a market cap of about $22.5 billion. China Unicom has been listed by the NYSE since 2000, with a current market cap of about $18 billion.

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Fisker Inc. stock: FSR shares jump 7% after stock market debut with NYSE


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