The New York Stock Exchange (NYSE) on Wednesday reversed course again, saying that it would delist three Chinese telecom equities from trading due to new US government guidance.
Meanwhile, Washington is considering adding Chinese ecommerce giant Alibaba Group Holding Ltd (阿里巴巴) and tech giant Tencent Holdings Ltd (騰訊) to the blacklist, the Wall Street Journal reported.
The latest flip-flop by the NYSE, which is to remove China Mobile Ltd (中國移動), China Telecom Corp Ltd (中國電信) and China Unicom Hong Kong Ltd (中國聯通), returns the exchange to its original policy announced last week.
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The exchange had abandoned the decision to delist two days ago amid criticism from Beijing, but on Wednesday said that it would follow “new specific guidance received on January 5, 2021, that the [US] Department of Treasury’s Office of Foreign Assets Control provided to the NYSE.”
The move would end trading in the firms after 2:30pm GMT on Monday next week.
The US Department of State and Department of Defense have discussed expanding the list of prohibited firms to include Alibaba and Tencent, the Wall Street Journal reported, citing people familiar with the matter.
According to the report, those officials have talked with the Treasury Department about the impact of delisting the major firms with a combined market value of US$1.3 billion and that are held by many US funds.
If Washington goes ahead with the broader sanctions, it would be further escalation of US President Donald Trump’s campaign against China.
Trump on Tuesday signed an executive order banning transactions involving Alipay (支付寶), WeChat Pay (微信支付) and other apps linked to Chinese companies, drawing strong criticism from Beijing.
It was his order in November last year that banned Americans from investing in Chinese companies deemed to be supplying or supporting the country’s military and security apparatus that led to delisting firms from Wall Street.
The NYSE last week said that it would end trading in the three state-owned Chinese telecoms, but changed course on Monday following “further consultation with relevant regulatory authorities,” only to reverse itself again.
Shares in Alibaba and Tencent dove by about 4 percent each in Hong Kong trading yesterday.
China Unicom fell more than 10 percent, while China Mobile shred 7 percent and China Telecom dropped nearly 9 percent.
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