NYSE to remove China’s top telecommunications operators

NYSE recently said it would suspend trading in securities issued by China Mobile, China Telecom Corp.

CHA -0.04%

, and China Unicom Hong Kong Ltd.

CHU -1.56%

At 11:00 at 11:00. It will act four days earlier if it is not confirmed by the Depository Trust & Clearing Corp that the clearinghouse will complete the trade on 7 January and 8 January.

NYSE said it would also stop trading in closed-end funds and exchange-traded products listed on its NYSE Arca exchange if they own banned shares.

China Unicom said on Friday it would release a statement in due course. China Mobile and China Telecom did not immediately respond to requests for comment.

An executive order signed by President Trump in November will bar Americans from investing in a list of companies that, according to the U.S. government, provide and support China’s military, intelligence and security services. The ban begins on January 11 and investors have until November to sell their shares.

The list currently includes 35 companies – including China’s largest chipmaker – as well as companies for surveillance, aviation, shipbuilding, construction and technology.

It was initially not clear whether the order over subsidiaries as well as parent companies and leaders of the US government clashed over how broad the blacklist should be, The Wall Street Journal reported in December.

However, the Treasury Department said this week that it would add subsidiaries to the blacklist if they were majority owned or controlled by a named company. The Treasury’s Office of Foreign Asset Management, which handles economic sanctions, also said the ban applies to derivatives and deposit receipts, as well as exchange-traded funds, index funds and mutual funds.

Last month, index compilers including MSCI Inc.,

FTSE Russell and S&P Dow Jones Indices said they would remove some Chinese shares from their benchmarks because of the order, although they did not exclude shares issued by subsidiaries and affiliates.

China Mobile, which has a market value of about $ 117 billion, was not on the original blacklist, although its mother, China Mobile Communications Group, was. US stocks are trading thin compared to its Hong Kong securities, FactSet data shows. About 2.1 million U.S. depository receipts have traded daily on average over the past three months, compared to 34 million shares in Hong Kong per day. Each ADR is equivalent to five ordinary shares in Hong Kong.

Other U.S. initiatives could also cause more delistings. Last month, Mr. Trump legislation signed that Chinese companies could kick-start US markets if US regulators are unable to investigate their audits within three years. Some Chinese companies, including Alibaba Group Holding Ltd.

en JD.com Inc.,

has already received secondary offerings in Hong Kong, which could help blunt the impact of such action.

Write to Chong Koh Ping by [email protected]