China telco shares hit by NYSE delisting row
Chinese authorities have raised the issue of lack of access to telecommunication services in Gwadar. PHOTO: FILE
Shares in China’s three biggest telecoms companies fell as much as 5% in Hong Kong on Monday, the first trading session since the New York Stock Exchange (NYSE) said it would delist the firms in a move China branded unwise and oppressive.
By the close of trade, the shares had mostly recovered.
The NYSE said on Thursday it would delist China Mobile Ltd, China Telecom Corp Ltd and China Unicom Hong Kong Ltd following the US government’s move in November to block investment in 31 firms it says are owned or controlled by China’s military.
Hua Chunying, a spokeswoman for China’s foreign ministry, said the US move was “unwise”, oppressive, and reflected how “random, arbitrary and uncertain” US rules can be.
“China is firmly opposed to the United States politicisation of the trade issue, the abuse of the state’s power and stretching of the concept of national security to suppress Chinese companies,” she told a regular news briefing on Monday.
The American Deposit Receipts (ADRs) listed by the three companies have a combined market value of under 20 billion yuan ($3.07 billion), or 2.2% of the firms’ equity, the China Securities Regulatory Commission has said.
The delisting could put short-term selling pressure on the stocks as the ADR shareholders may convert their holdings into Hong Kong shares before selling them. The stocks’ potential removal from indexes such as MSCI and FTSE could also lead to selling by index funds, said Citi analyst Michelle Fang.
Published in The Express Tribune, January 5th, 2021.
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