New York Stock Exchange turns 180 degrees

D.he New York Stock Exchange has given up plans to remove three Chinese telecommunications companies from listing. The decision to allow China Telecom, China Mobile and China Unicom to continue trading on the stock exchange was made after consultations with the regulatory authorities, the New York Stock Exchange (NYSE) announced on Monday.

The exchange did not explain the decision in more detail. The government in Beijing had sharply criticized the plans to withdraw the listing of Chinese companies and threatened countermeasures.

The share prices of the three companies shot up after the announcement. In Hong Kong, China Unicom’s quotation rose by more than 8 percent on Tuesday morning, while China Mobile and China Telecom both rose by more than 6 percent.

The NYSE announced at the end of last week that it would stop listing the shares of the three Chinese companies. She had justified this with an ordinance of the outgoing administration of President Donald Trump from November, by which investments in companies with connections to the Chinese military and security apparatus are prohibited. The ordinance is due to come into force on January 11th.

The Chinese leadership is using American capital to expand and modernize the military and security apparatus, the decree says. Beijing “forced” private companies to support the military and intelligence agencies. These companies raised money on the international capital markets, including from American investors. Trump’s security advisor Robert O’Brien said in November that many American investors were unwittingly investing in such companies.

Under Trump, relations between the United States and China were marked by high tensions. After his electoral defeat on November 3rd, the Republican was replaced on January 20th by the Democrat Joe Biden in the White House. Although no fundamental turnaround is expected from this, it is expected in the political style.

Edison Lee, director of telecom research at Jefferies Financial Group in Hong Kong, described the decision as a “bizarre twist, to the detriment of American investors. It’s about a lot: Chinese companies have raised at least $ 144 billion in the United States over the past twenty years, the Bloomberg news agency wrote. American companies, on the other hand, do not want to lose access to the Chinese market.

The turnaround in the NYSE is quite unexpected, Jackson Wong, chief of wealth management at Amber Hill in Hong Kong, told Bloomberg. Some funds would now have to buy back shares that they were obliged to sell. Some investors are now also pricing in a relaxation between China and America.

The exit of the Trump administration puts a big question mark behind everything it has done, said Orville Schell, director of the Asia Society’s center for American-Chinese relations.


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