New York Stock Exchange (NYSE).
Photographer: Michael Nagle / Bloomberg
Photographer: Michael Nagle / Bloomberg
The New York Stock Exchange said it would eliminate three Chinese corporations in order to comply with a US executive order that imposed 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 January 11, and their write-off procedures have begun, according to a stock exchange statement.
The three companies have separate listings in Hong Kong. They all generate all of their revenue in China and do not have a significant presence in the US, except for their lists there.
US President Donald Trump signed an order in November banning US investment in Chinese companies owned or controlled by the military, in an attempt to put pressure on Beijing on what it considers abusive trade practices. Order bans US investors from buying and selling shares in a list of Chinese companies designated by the Pentagon as having military ties.
Later, the Chinese Foreign Ministry accused the US of “violent slander” of its civil-military integration policies and promised to protect the country’s companies. Chinese officials have also threatened to respond to the Trump administration’s previous actions with their own blacklist of American companies.
The executive order led to the elimination of a number of companies indexes compiled by MSCI Inc., S&P Dow Jones Global indices and FTSE Russell.
Global exchanges, including the NYSE and Nasdaq Inc., have courted Chinese companies over the past decade as they sought to expand their IPO business, particularly in the internet sector. In response, Hong Kong Exchanges & Clearing Ltd. has changed rules in recent years to attract lists, including allowing the sale of shares by weighted voting companies – strengthening the power of company founders at the expense of weaker protections for minority investors.
Companies, including e-commerce giants Alibaba Group Holding Ltd. and JD.Com Inc., which already owned listings in New York, have been making secondary listings in Hong Kong for the past two years as the US-China trade war intensifies.
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