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In yet another reversal, the New York Stock Exchange has finally decided to delist three Chinese telecom companies.
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On Wednesday, the Big Board, owned by the Intercontinental Exchange, said it would move forward with delisting China Mobile, China Telecom and China Unicom following "new specific guidance received on Jan. 5, 2021" from the Treasury Department’s Office of Foreign Assets Control.
|ICE||INTERCONTINENTAL EXCHANGE INC.||114.83||+1.26||+1.11%|
The delisting of the three Chinese telecoms American depositary receipts will occur on Jan. 11, 2021, after 9:30 a.m., the exchange added.
|CHL||CHINA MOBILE LTD.||28.54||-0.79||-2.68%|
|CHU||CHINA UNICOM LTD.||5.99||-0.16||-2.60%|
TREASURY SECRETARY MNUCHIN INTERVENE IN NYSE'S CHINESE DELISTING SAGA: REPORT
On Tuesday, it was reported that Treasury Secretary Steven Mnuchin intervened in the saga, saying he disagreed with the exchange's decision to not move forward with the delisting, despite originally saying it would.
The move came just days after the NYSE said it had begun the process on Thursday of delisting the securities of China's three largest telecommunications companies in response to an executive order by President Trump in November, which prohibits "any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Communist Chinese military company."
The Treasury Department released an FAQ page on its website Monday, offering clarification on the order hours before the exchange announced its decision not to delist the companies, which said the order "does not require U.S. persons, including U.S. funds and related market intermediaries and participants, to divest their holdings in publicly traded securities (and securities that are derivative of, or are designed to provide investment exposure to, such securities) of the Communist Chinese military companies identified."
One of the sources reportedly said that the Treasury may offer further clarification through the Office of Foreign Assets Control.
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The Chinese have been highly critical of the move to delist the stocks, with the country's Securities Regulatory Commission arguing in a statement on Friday that the executive order is "based on political purposes" and has "entirely ignored the actual situations of relevant companies and the legitimate rights of the global investors, and severely damaged market rule and order."
CHINA WARNS OF RETALIATION FOR NYSE'S DELISTING OF COMPANIES
A spokesperson for the Chinese Commerce Ministry added in a statement on Saturday that China "opposes the Americans from abusing national security by listing Chinese companies into the so-called ‘Communist China Military Companies’ list" and that it would take "the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies.”
In addition, the ministry's statement said that the actions would also “greatly weaken all parties’ confidence in the U.S. capital market.”
The ministry did not offer details on what the countermeasures might be.
Shares of the three Chinese telecoms were mixed, with China Mobile and China Telecom down 1.4% and 2.1%, respectively, while China Unicom was slightly higher in Wednesday trading.
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FOX Business' Lucas Manfredi and The Associated Press contributed to this story.
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