Taking another U-turn, the New York Stock Exchange has said it will delist three Chinese telecom companies.<\/p>\n
The announcement came a day after United States Treasury Secretary Steve Mnuchin told the NYSE chief he disagreed with an earlier decision to reverse the delistings.<\/p>\n
The latest move, which is effective January 11, marks the third time in less than a week the Big Board has ruled on the issue.<\/p>\n
The flip-flopping highlights the confusion over which companies were included in an executive order issued by President Donald Trump in November barring US persons from investing in publicly traded companies Washington deems to be tied to the Chinese military.<\/p>\n
It also coincides with escalating tensions within Washington on China policy in the final days of the Trump administration.<\/p>\n
![\"u-turn-nyse-chinese-companies-delist-rapid-news-dailyrapidnews-rapidnews\"](\"https:\/\/dailyrapidnews.com\/eng\/wp-content\/uploads\/2021\/01\/u-turn-nyse-chinese-companies-delist-rapid-news-dailyrapidnews-rapidnews.jpg\")
\u201cThere is a unique situation where there is an outgoing administration that is disengaged and (there are) orders sitting out there, so something has to be done, but no one wants to take on responsibility,\u201d said Leland Miller, the CEO of the US-based consultancy China Beige Book.<\/p>\n
\u201cI think in future that anyone getting these orders will say: \u2018Tell us exactly what you want us to do,\u2019 and force administrations to be more focused.\u201d<\/p>\n
The NYSE originally on Thursday announced plans to delist China Mobile Ltd, China Telecom Corp Ltd and China Unicom Hong Kong Ltd. On Monday, it did a U-turn after consulting with regulators in connection with the US Treasury\u2019s Office of Foreign Assets Control and decided to keep them listed. Wednesday\u2019s decision marks a return to the original plan.<\/p>\n
The decision to keep the companies listed had prompted criticism that Treasury was being dovish on China.<\/p>\n
Mnuchin has long been seen as seeking to thwart attempts by hardliners in the administration – many led by the State department – to crack down on Chinese companies.<\/p>\n
But sources, who asked to remain anonymous due to the sensitivity of the matter, said Mnuchin had called NYSE President Stacey Cunningham on Tuesday to express his concerns over the decision to relist the companies, as the exchange sought further confirmation on the matter.<\/p>\n
\u201cThe Treasury secretary was on the phone with the NYSE (president) now and was told that NYSE would reverse their decision,\u201d a U.S. official told Reuters on Tuesday.<\/p>\n
China\u2019s foreign ministry spokeswoman Hua Chunying, when asked about the NYSE announcement, told a regular news briefing on Thursday that Washington\u2019s actions would ultimately harm the United States\u2019 interests, credibility and image.<\/p>\n
On Wednesday the exchange operator said in a statement its latest decision, to move forward with the delistings, was based on \u201cnew specific guidance received on January 5, 2021, that the Department of Treasury\u2019s Office of Foreign Assets Control provided to the NYSE\u201d.<\/p>\n
Trading in the securities will be suspended at 4:00am on January 11, the NYSE said.<\/p>\n
A spokesperson for the exchange operator declined to comment further.<\/p>\n
The flip-flopping caused investors to sell positions in the securities, the prices of which dropped on the initial announcement, then rose on the next, and tumbled again on Wednesday.<\/p>\n
Republican Senator Ben Sasse, a member of the Senate Select Committee on Intelligence, said the decision was the \u201cright call\u201d.<\/p>\n
\u201cChinese firms that reject fundamental transparency requirements and have ties to the Chinese military shouldn\u2019t benefit from American investment,\u201d Sasse said.<\/p>\n
Trump\u2019s executive order technically takes effect on Jan. 11 but does not ban purchases by US investors until November.<\/p>\n
While the directive stops short of forcing a delisting, a separate bill signed into law by Trump in November will kick Chinese companies off US bourses if they do not fully comply with the country\u2019s auditing rules in three years.<\/p>\n
The US State Department plans to release as soon as Wednesday a fact sheet urging US investors to comply with the executive order, according to three people familiar with the matter and a copy of the document seen by Reuters.<\/p>\n
The Treasury said on Wednesday that market intermediaries could help investors divest securities of the blacklisted companies.<\/p>\n
S&P Dow Jones Indices, which has also made U-turns in decisions, said late on Wednesday it will remove the three telecom companies\u2019 ADRs from its benchmarks before Jan. 11.<\/p>\n
Other index makers, including FTSE Russell and MSCI Inc, have cut a dozen Chinese companies on the list from their benchmarks, but have not removed the three telecom companies, all of which have major passive US funds among their top shareholders.<\/p>\n","protected":false},"excerpt":{"rendered":"
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