On January 7, 2021, the New York Stock Exchange (NYSE) announced that it will delist three Chinese companies – China Mobile, China Telecom, and China Unicom – in compliance with a US Executive Order implemented on November 12, 2020. This move is part of a larger effort by the Trump administration to restrict investments in Chinese entities. In this blog post, we’ll take a look at the implications of this Executive Order and how it could affect investors’ portfolios. We’ll also discuss potential strategies to counter the delisting of these three companies and other possible measures investors can take should they wish to retain their investments.
What is the NYSE?
The New York Stock Exchange (NYSE) is the world’s largest stock exchange by market capitalization. The NYSE is located at 11 Wall Street in Lower Manhattan, New York City. The NYSE has a market cap of over $30 trillion and trades over $2 trillion worth of stocks daily. The NYSE is operated by Intercontinental Exchange (ICE), which also operates the London Stock Exchange (LSE).
The NYSE delisted three Chinese companies, China Mobile, China Telecom, and China Unicom, in January to comply with a US EO imposing restrictions (Max Zimmerman/Bloomberg).
What is the US EO?
The US EO is a presidential executive order that imposes restrictions on Chinese companies. It was issued in response to China’s decision to force US tech companies to store their data in China. The EO prohibits US investors from buying shares of Chinese companies that are listed on US stock exchanges. The three Chinese companies that will be delisted from the NYSE are China Mobile, China Telecom, and China Unicom.
Who are the three Chinese companies?
The three Chinese companies are China Mobile, China Telecom, and China Unicom. All three are state-owned enterprises and the largest telecommunications providers in China. They offer mobile and fixed-line voice services, data services, internet access, and other value-added telecommunications services.
What does delist mean?
Delist means to remove a stock or security from an exchange. In this case, the NYSE will be delisting three Chinese companies – China Mobile, China Telecom, and China Unicom – from its stock exchange. This means that investors will no longer be able to buy or sell shares of these companies on the NYSE.in January to comply with a US EO imposing restrictions. This move will likely have a negative impact on the share prices of these companies as well as on investor confidence in the Chinese stock market.
What are the restrictions being imposed?
The New York Stock Exchange (NYSE) is set to delist three Chinese companies, China Mobile, China Telecom, and China Unicom, on January 11th in order to comply with a US Executive Order (EO) that was signed by President Trump in November.
This EO prohibits any US-based firms from investing in companies that the US government has determined are owned or controlled by the Chinese military. As such, the NYSE has no choice but to delist these companies if they wish to remain compliant with US regulations.
The move is likely to further escalate tensions between the US and China, which have been souring for some time now over a variety of issues. It also underscores just how difficult it is for US-based companies to do business with China, even when those businesses are not directly involved in the country’s volatile political landscape.
How will this affect investors?
The recent news that the New York Stock Exchange (NYSE) will delist three Chinese companies, China Mobile, China Telecom, and China Unicom, on January 11th in order to comply with a U.S. Executive Order imposing restrictions has caused quite a stir. Many investors are wondering how this will affect them and their investment portfolios.
Here’s what you need to know:
1. How will this affect investors?
If you are an investor in any of these three Chinese companies, you will need to sell your shares by January 11th when the delisting takes effect. After that date, you will not be able to trade these shares on the NYSE.
However, it is important to note that this does not mean that you have to sell your shares if you don’t want to. You can still hold onto your shares and trade them on other exchanges that continue to list these companies. For example, the Hong Kong Stock Exchange has announced that it will not delist these companies in response to the U.S. Executive Order.
2. What about ETFs and index funds?
If you own an ETF or index fund that tracks the NYSE or includes these Chinese companies in its holdings, those holdings will be sold as well. However, it is worth noting that most ETFs and index funds are diversified enough that the impact of losing these three Chinese stocks will likely be minimal.
Conclusion
The delisting of these three Chinese companies from the NYSE is just another example of how strained US-China relations have become in recent years. It may be necessary for compliance with domestic law, but it will no doubt have a significant impact on investors and business ties between the two nations. Going forward, it remains to be seen if any sort of resolution or compromise can be reached that would keep US and Chinese companies listed on the same exchange. Until then, we will just have to wait and see what comes next.
