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Dragon Slaying: Chinese Telcos face delisting from NYSE



The New York Stock Exchange stated it will delist three Chinese corporations to adhere to a U.S. executive order that enforced restrictions on companies determined as associated with the Chinese armed force.

China Mobile Ltd., China Telecom Corp Ltd., China Unicom Hong Kong Ltd. will be suspended from trading between Jan. 7 and Jan. 11, and procedures to delist them have started, according to a declaration by the exchange.

Quantitative hedge fund supervisors including Renaissance Technologies LLC, Dimensional Fund Advisors LP and 2 Sigma Investments LP were among the biggest holders in these U.S. listings but the stakes they held at the end of September were small, 13F filings reveal.

The three Chinese companies have separate listings in Hong Kong. All produce the totality of their earnings in China and have no significant existence in the U.S. except for their listings there. Their shares are also very finely traded on the New York Stock Exchange compared to their main listings in Hong Kong, making this NYSE delisting more of a symbolic blow in the middle of increased geopolitical friction in between the U.S. and China. TikTok, Hong Kong and More U.S.-China Flashpoints: QuickTake U.S. President Donald Trump signed an order in November disallowing American investments in Chinese companies owned or controlled by the military, in a bid to pressure Beijing over what it deems violent company practices. The order prohibited U.S. financiers from buying and selling shares in a list of Chinese companies designated by the Pentagon as having military ties. Vowed to Protect The Chinese Foreign Ministry later on implicated the U.S. of "viciously slandering" its military-civilian combination policies and pledged to secure the nation's companies. Chinese authorities have also threatened to react to previous Trump administration actions with their own blacklist of U.S. business. The executive order has actually resulted in a series of business being eliminated from indexes put together by MSCI Inc., S&P Dow Jones Global Indices and FTSE Russell. The U.S. Federal Communications Commission in May disallowed China Mobile from running in the U.S. In December, it bought providers to eliminate equipment made by Huawei Technologies Co., and begun checking out whether China Telecom need to be allowed to operate in the country. China Telecom's U.S. system told the FCC in a June 8 filing that it's an independent organization based in the U.S. and exempt to Chinese federal government control. FCC Relocations Versus China Telecom and Huawei, Pointing Out Security International exchanges, consisting of NYSE and Nasdaq Inc., courted Chinese companies throughout the past decade as they tried to broaden their IPO service, especially in the internet sector. In reaction, Hong Kong Exchanges & Cleaning Ltd. changed its rules in recent years to tempt back listings, including permitting share sales by business with weighted ballot rights-- reinforcing the power of company founders at the expense of weaker defenses for minority financiers. Companies consisting of e-commerce giants Alibaba Group Holding Ltd. and JD.Com Inc., which already had listings in New york city, conducted secondary listings in Hong Kong in the past two years as stress in between the U.S. and China magnified on a series of concerns consisting of trade and the novel coronavirus.

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