New York Stock Exchange U-turns on decision to boot China's three biggest telcos

But hasn't said why

The New York Stock Exchange has reversed an earlier decision to delist China's three largest telecommunications companies.

Last Thursday the NYSE said it would delist China Telecom, China Mobile, and China Unicom in order to comply with an executive action issued by President Trump in November. These delistings would happen as early Thursday, 7 January, although the bourse noted that affected businesses would have the right to appeal.

Issued on 12 November, Executive Order 13959 bans American individuals and institutions from purchasing securities in businesses deemed to be linked to the Chinese military, either directly or indirectly, by the Secretary of Defence. This ban would enter effect on 11 January 2021.

And while the criteria for what can be deemed a link to the Chinese military is unclear, in June the Defense Department published two lists, here and here [both PDFs], of businesses it believes meets the spec. These include the aforementioned three telcos, Huawei, and surveillance tech firm Hikvision, as well as a bevy of industrial outfits including the Aviation Industry Corporation of China.

The NYSE has not explained its reversal, other than to say that it "no longer intends to move forward with the delisting action" following "further consultation with relevant regulatory authorities".

It said it will "continue to evaluate the applicability of Executive Order 13959 to these Issuers and their continued listing status".

All three telcos have since acknowledged this U-turn in filings to the Hong Kong Stock Exchange.

Shares in China Mobile recovered 5.13 per cent upon the news. China Unicom and China Telecom were up 8.5 per cent and 3.35 per cent respectively against the previous day's close.

While this is welcome news for the telcos, NYSE activity accounts for a small portion of their trading volume. All three are primarily listed on the Hong Kong Stock Exchange, with China Unicom additionally listed in Shanghai. The biggest relief is likely being felt by US investors who faced having to offload their positions in a matter of days. Poor things. ®

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