The NYSE has abandoned its decision to forcefully delist three major telecom companies in China: China Telecom, China Mobile and China Unicom. Previously, the intentions were associated with a decree by President Donald Trump aimed at banning investments in companies that are associated with the Chinese military.
On Monday, the New York Stock Exchange (NYSE) said it no longer plans to delist the three Chinese telecom giants. Earlier on December 31, the NYSE said it intends to exclude shares of China Telecom, China Mobile and China Unicom from circulation.
According to the NYSE’s official announcement, the decision to abandon these plans was made after “further consultations with the relevant regulatory authorities in connection with the Foreign Assets Control Office.”
Some market experts have suggested that the Foreign Assets Control has indicated to the exchange that delisting is not necessary, although US investments in certain related companies (such as suppliers) have been prohibited.
These actions by the NYSE were a consequence of the decree of US President Donald Trump, signed on November 12. The decree aims to prohibit American companies and individuals from investing in firms that the Trump administration claims are helping the Chinese military.
On Monday, the China Securities Regulatory Commission said the ruling was based on “political objectives” and “completely ignored the actual position of the companies concerned and the legitimate rights of global investors, and seriously damaged market rules and order.”
The actions of the White House and the exchange have forced large investment funds such as MSCI, S&P Dow Jones Indices and FTSE Russell, which capitalize their assets based on stock indices, as well as the popular trading application Robinhood to take steps to comply with the presidential decree and have removed about 10 shares from their assets. However, to date, MSCI, S&P Dow Jones Indices and FTSE Russell have retained shares in the three Chinese telecommunications companies.
However, China Telecom, China Mobile and China Unicom have made an official statement that they have taken note of the latest NYSE announcement and will release information in accordance with the rules, adding that investors should pay attention to investment risks.
Drew Bernstein, co-chairman of MarcumBP, which audits and advises Chinese companies before IPOs and public companies, said the situation would entail more mistrust from American investors towards Chinese public companies.
At the same time, in recent years, interest in investing in the growing Chinese market has grown significantly, and some analysts estimate that it accounts for at least a quarter of US foreign income (stock exchanges).
After the inauguration of US-elected President Joe Biden on January 20, US policy towards China may change, but many experts believe the changes will most likely affect the form of interaction, while tensions and struggles to protect American companies and comply with trade rules remain … Marketinfo.pro wrote about the position of Biden and the new US Treasury Secretary Janet Yellen in the article “What to expect from the new US Treasury Secretary Janet Yellen”.