NYSE to delist three Chinese telecom companies

The New York Stock Exchange (NYSE) is starting the process of delisting securities of three Chinese telecom companies, after President Donald Trump last month barred US investments in Chinese firms which are owned or controlled by the  Chinese military. NYSE said that the issuers, China Telecom Corporation Limited , China Mobile Limited and China Unicom (Hong Kong) Limited , were no longer suitable for listing as the order prohibits any transactions in securities “designed to provide investment exposure to such securities, of any Communist Chinese military company, by any United States person.” NYSE said that it would suspend trading in the stocks on either Jan. 7 or Jan. 11. The issuers have a right to a review of the decision. Each of the telecoms companies named by the NYSE also has a listing in Hong Kong.

The order sought to give teeth to a 1999 law that mandated that the Department of Defence compiled a list of Chinese military companies. The Pentagon, which only complied with the mandate this year, has so far designated 35 companies, including oil company CNOOC Ltd and China’s top chipmaker, Semiconductor Manufacturing International Corp. China has condemned that ban, and fund managers have said it could benefit non-US investors able to pick up the stocks.

President Donald Trump signed a law last month that would kick Chinese companies off US stock exchanges unless they adhere to American auditing standards. Market participants said this would intensify a rush by US listed Chinese firms to seek back up listings in Hong Kong. Ties between Washington and Beijing have grown increasingly antagonistic over the past year as the world’s top two economies sparred over Beijing’s handling of the coronavirus outbreak, imposition of a national security law in Hong Kong and rising tensions in the South China Sea.