TLTP
NEW YORK
In a sudden reversal, the New York Stock Exchange (NYSE) said it will no longer delist China’s three largest state-owned telecommunications corporations allegedly linked to the Chinese military.
In a statement, the world’s biggest stock exchange said it dropped the plans after “further consultation with relevant regulatory authorities in connection with the Office of Foreign Assets Control.”
The announcement comes four days after the NYSE said it would remove the shares of China Mobile, China Telecom, and China Unicom Hong Kong that had been present on the US market for nearly two decades.
The US exchange had planned to delist all three companies as early as this week to comply with a US executive order banning investments in enterprises owned and controlled by the Chinese military.
Securities of all three firms shot up on the Hong Kong stock market after the latest announcement. China Unicom gained 8.5 percent, China Telecom rose by eight percent, while China Mobile jumped by seven percent.
The order, cited by the index provider and, was signed by US President Donald Trump in November. The document barred US investors from funding more than 30 Chinese firms it deemed “communist Chinese military companies.”
“I suspect that the NYSE never wanted to delist these stocks in the first place. They acted on guidance regarding the executive order,” Jeffrey Halley, a senior market analyst from Oanda said.
“That interpretation has clearly changed and the NYSE has moved quickly to change course,” he added. The three companies earn all of their revenue in China and have no significant presence in the US. Like many other large Chinese companies, they have a dual listing in the US and Hong Kong.
There are currently more than 200 Chinese companies listed on US stock markets with a total market capitalization of $2.2tn (£1.6tn). In some cases, however, their share listings have become tangled in ongoing diplomatic and trade friction between the US and China.
Mr Trump has not only pushed for companies to be delisted, but has targeted a number of Chinese companies including TikTok, Huawei and Tencent on the grounds of national security.
China responded with its own blacklist of US companies as tensions between the economic giants escalate.
On Monday a spokeswoman for China’s foreign ministry Hua Chunying had criticised the initial decision to delist the companies as “unwise” and reflective of how “random, arbitrary and uncertain” US rules can be.
Some analysts expect the end of the Trump administration might lead to a lull in the trade dispute, as the Chinese government waits to see what approach incoming President Joe Biden might take to US-Chinese relations.
“These are the acts of a dying administration and China will probably be content to await President Biden, and more clarity then over the general path of US China relations from the new administration,” said Mr Halley.
