S&P DJI removes Chinese firms from indexes

S&P Dow Jones Indices have decided to remove some Chinese companies from indexes used to track market performance following a U.S. government ban on Americans investing in their stocks and bonds. The Chinese government opposed the move as politically motivated. The companies affected include surveillance technology provider Hikvision, processor chip manufacturing SMIC among others.

The announcement follows President Donald Trump’s Nov.13 order barring Americans from buying stocks or bonds issued by companies deemed to be linked to China’s military.The move by S&P DJI Indices will require investment funds that track stock market movements to sell shares in those Chinese companies. Last week, index provider FTSE Russell said it will shares of Hikvision and seven other Chinese companies from its FTSE Global Equity Index Series and other products and that it had acted on feedback from subscribers and other stakeholders.

S&P DJI said it would remove mainland-listed A-shares, Hong Kong-listed H-shares and American Depositary Receipts (ADRs) of 10 companies including Hangzhou Hikvision Digital Technology Co Ltd and Semiconductor Manufacturing International Corp (SMIC) from all equity indexes prior to the market open on Dec. 21.The company said it will also remove securities issued by 18 Chinese companies from its fixed income indices before Jan. 1.