The New York Stock Exchange (NYSE) no longer plans to comply with a Trump administration order to delist Chinese telecoms groups.
NYSE began proceedings to delist China Mobile, China Unicom, and China Telecom last week after the order signed by President Trump in November.
The order is designed to prevent transactions in securities “designed to provide investment exposure to such securities, of any Communist Chinese military company” by any person in the US.
Beijing condemned the order and the companies involved maintain they have no links with the Chinese military.
“China opposes the Americans from abusing national security by listing Chinese companies into the so-called ‘Communist China Military Companies’ list and will take the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies,” a Chinese Commerce Ministry spokesperson said in a statement.
NYSE originally said that the companies were “no longer suitable for listing” and removals could begin from January 7th.
However, the NYSE said on Monday evening that “in light of further consultation with relevant regulatory authorities,” the exchange no longer intends to go ahead with the delistings.
The listings only account for a small percentage of the Chinese telcos’ shares. The heaviest-traded, China Telecom’s shares, comprise no more than 12 percent of those traded in Hong Kong in 2020. For China Mobile, the ratio was just 6.9 percent.
All of the companies’ shares took a dive after the delisting announcement but have since begun recovering after the NYSE announced that it no longer plans to remove them.
China Unicom climbed almost 11 percent to reach a six-week high on Tuesday, China Telecom was up over 8 percent, and China Mobile as much as 7.5 percent.
The Chinese yuan is also moving higher as hopes are raised about de-escalation in US-China tensions as President-elect Joe Biden prepares to take office.
Some analysts believe the market is being overly optimistic and the Biden administration will not want those all-important first 100 days to be known for immediate concessions to the Chinese Communist Party.
Update: The NYSE has backtracked on its backtrack and will proceed with delisting the telecoms groups.
China Telecom Corporation Limited (NYSE: CHA), China Mobile Limited (NYSE: CHL), and China Unicom (Hong Kong) Limited (NYSE: CHU) after 9:30 a.m. eastern time on January 11, 2021." https://t.co/634Uk29vDH— *Walter Bloomberg (@DeItaone) January 6, 2021
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