The New York Stock Exchange (NYSE).
Photographer: Michael Nagle / Bloomberg
Photographer: Michael Nagle / Bloomberg
The New York Stock Exchange has said it will remove three Chinese companies 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 between January 7 and January 11, and according to the stock exchange statement, the process of delisting it has begun.
The three companies have separate listings in Hong Kong. Everyone generates their total income in China and has no significant presence in the US except for their listings there.
In November, US President Donald Trump signed an order banning US investments in Chinese-owned or controlled enterprises in an attempt to put Beijing under pressure over what he considers abusive business practices. The order banned U.S. investors from buying and selling shares in a list of Chinese companies designated by the Pentagon as military ties.
The Chinese Foreign Ministry later accused the US of “maliciously slandering” its military-civilian integration policies and promising to protect the country’s companies. Chinese officials have also threatened to respond to previous Trump administration actions with their own blacklist of U.S. companies.
The executive order resulted in the removal of a number of companies indices compiled by MSCI Inc., S&P Dow Jones Global Indexes and FTSE Russell.
Global exchanges, including NYSE and Nasdaq Inc., have sued 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. arrange for the past few years to attract listings back, including allowing share sales by companies with weighted voting rights – which strengthens the power of the company’s founders at the expense of weaker protection for minority investors.
Companies, including e-commerce giants Alibaba Group Holding Ltd. and JD.Com Inc., which has already had listings in New York, has been doing secondary listings in Hong Kong for the past two years while the US-China trade war has intensified.
(Add details from second paragraph)