The New York Stock Exchange’s decision to expel three telecommunications enterprises of China has angered China – but analysts say Beijing may ‘Not’ take drastic measures to retaliate in Washington.
The stock exchange announced on Thursday that it would remove China Telecom, China Mobile and China Unicom. Trading should be stopped immediately on January 7, or after Jan. 11.
The stock on Hong Kong’s list of all three companies went down on Monday, the first Hang Seng trading day since the announcement. China Mobile, China Unicom and China Telecom have all dropped by more than 3% in Asia.
What Has China Said?
The NYSE move is in line with a resolution passed by United States President Donald Trump in November, which barred Americans from investing in companies suspected of being linked to China’s military. That happened during a dispute between the United States and China last year, with both sides causing the origin of the coronavirus, among others.
In response to the U.S. move, China’s trade ministry said on Saturday “it will take the necessary steps to secure the rights and interests of Chinese businesses.”
Asked if it would be possible for many Chinese companies to be diverted, Brendan Ahern, chief investment officer of the investment company KraneShares, said: “I don’t see this being extended beyond these three specific names, simply because this was really driven by this executive order.”
What’s Next?
Speaking to CNBC’s “Squawk Box Asia” on Monday, he said the order could “change course” after President-elect Joe Biden was sworn in on January 20.
He also said that on the Chinese side, Beijing “would like to give Biden’s management a chance to re-establish relations.”
Ronald Wan, chairman of the non-executive committee at Partners Financial Holdings, added that any action taken by Beijing would probably not be “significant.”
“We will need to see if the Chinese government will take revenge on the U.S. But I think the real things that will be done will not matter, perhaps limiting some kind of structures related to the U.S. government, jobs in China or Hong Kong. But in reality, I think the government is still accepting US money and money to go to Asian and Hong Kong markets, “he told CNBC’s” Street Signs Asia “on Monday.
Ahern said investors of the three U.S. listed stocks — China Telecom, China Mobile and China Unicom —will be able to convert them to their Hong Kong-listed shares.
Synopsis
The New York Stock Exchange said on Thursday it would remove (technical word is delist) China Telecom, China Mobile and China Unicom, as soon as January 7, or January 11.
The stocks listed in Hong Kong for the three companies fell sharply on Monday.
The NYSE move is in line with a presidential directive signed by US President Donald Trump last November, which barred Americans from investing in companies they said were connected to the Chinese military.
