NYSE to Delist China’s leading telecom operators

NYSE said, at the latest, that it would suspend trading in securities issued by China Mobile, China Telecom Corp.

NO -0.04%

, and China Unicom Hong Kong Ltd.

CHU -1.56%

at 4 a.m. on Jan. 11. It will act four days in advance if it does not receive confirmation from Depository Trust & Clearing Corp. that the clearing house will liquidate the business carried out on 7 and 8 January.

NYSE said it would also stop trading closed-end funds and listed products on its NYSE Ark stock exchange if they hold prohibited shares.

On Friday, China Unicom said it will issue a statement in due course. China Mobile and China Telecom did not immediately respond to requests for comment.

An executive order signed by President Trump in November will prevent Americans from investing in a list of companies, according to the U.S. government that provides and supports China’s military, intelligence and security services. The ban begins on January 11 and investors have until November to divest their stakes.

Currently, the list includes 35 companies – including China’s largest chip maker – as well as surveillance, aerospace, shipbuilding, construction and technology companies.

Initially, it was unclear whether the order covered both subsidiaries and parent companies and U.S. government leaders on the breadth of the blacklist, the Wall Street Journal reported in December.

However, this week, the Treasury Department said it would add subsidiaries to the blacklist if they were majority-owned — or controlled — by a company that has been named. The Foreign Assets Control Treasury Office, which manages economic sanctions, also said the ban covered derivatives and deposit income, as well as exchange-traded funds, index funds and investment funds. .

Last month, index compilers included MSCI Inc.,

FTSE Russell and S&P Dow Jones Indices said they would withdraw some Chinese shares from their benchmarks due to the order, although they do not exclude shares issued by subsidiaries and subsidiaries.

China Mobile, which has a market value of about $ 117 billion, was not blacklisted, although its father, China Mobile Communications Group, was. Its US shares are traded compared to its Hong Kong stocks, according to FactSet data. Approximately 2.1 million U.S. deposit receipts were traded daily on average over the past three months, compared to Hong Kong’s 34 million shares a day. Each ADR is equivalent to five common shares in Hong Kong.

Other U.S. initiatives could also produce lower ones. Last month, Trump signed legislation that could cause Chinese companies to enter U.S. markets if U.S. regulators cannot inspect their audits within three years. Some Chinese companies, including Alibaba Group Holding Ltd.

and JD.com Inc.,

you have already obtained secondary listings in Hong Kong, which could help reduce the impact of this action.

Write to Chong Koh Ping to [email protected]