SHANGHAI (Reuters) – China’s top three telecoms companies saw their shares fall as much as 5% in Hong Kong on Monday, the first trading session on the New York Stock Exchange (NYSE) said it will take off companies based on a plan marked by China as “political” and with “limited” impact.
The NYSE said on Thursday it would eliminate China Mobile Ltd, China Telecom Corp Ltd and China Unicom Hong Kong Ltd following the US government’s November move to block investment in 31 companies it said were owned or controlled by the Chinese military.
The China Securities Regulatory Commission, in a question and answer posted on its website on Sunday, said the plan was “politically motivated”.
The measure “completely ignores the real situation of the relevant companies and the legitimate rights and interests of global investors and severely undermines normal market rules,” he said.
U.S. deposit receipts listed by the three telecommunications companies have a combined market value of less than 20 billion yuan ($ 3.07 billion), or 2.2% of the companies’ equity, the regulator said.
“Even if it is eliminated, the direct impact on the development and functioning of the companies’ market is quite limited,” he said.
Shares of China Mobile fell to 4.5% in Hong Kong on Monday to US $ 42.20, the lowest price since July 2007. China Telecom fell by up to 5.6% and China Unicom lost 3 4% compared to a 0.8% increase in the Hang Seng benchmark.
All three said they had not received any delisting notifications from the NYSE.
In a research note, Citic Securities analysts said the write-off decision was in line with expectations.
“The three companies have on average only 1.5% of the shares listed in the US, and the rest in Hong Kong, have sufficient liquidity and have not made any fundraising in the US for 20 years. Holding shares listed in the US will only pose a greater risk to them. “
Washington has stepped up its tough stance against China in recent weeks. In December, he added dozens of Chinese companies to a trade blacklist, accusing Beijing of using them to capitalize on civilian technology for military purposes.
On Saturday, the Chinese Ministry of Commerce said it would take “necessary measures” to protect the interests of Chinese companies.
“In recent years, it has been quite normal to see Chinese companies take off the list in the US or have secondary listings in Hong Kong,” Citic analysts wrote on Monday. “With the write-off, the three telecommunications companies will have a chance to have their shares revalued and reduce the cost of financial disclosure.”
($ 1 = 6,5250 yuan)
Reporting by Engen Tham, Wang Jing, Samuel Shen and Pei Li; Edited by Christopher Cushing