Caixin
Jan 29, 2021 07:24 PM
BUSINESS & TECH

U.S. Investors Won’t Be Able to Trade China Telcos From March 9

The New York Stock Exchange
The New York Stock Exchange

China’s three major telcos said trading by American investors in their stocks will be permitted through March, two months later than many previously believed under a November executive order by former U.S. President Donald Trump.

All three companies’ names appeared on a U.S. government list Jan. 8 saying they had ties to the Chinese military. Trump’s November executive order banned U.S. entities from trading in any Chinese firms whose named appeared on that list.

While trading was halted in the New York-listed shares of China Mobile Ltd., China Unicom (Hong Kong) Ltd. and China Telecom Corp. Ltd. effective Jan. 11, it continued in Hong Kong where the three stocks concurrently trade. But many believed U.S. entities were barred from trading in the three companies’ Hong Kong-listed stocks as of Jan. 11 as well.

In the latest development, all three carriers published simultaneous notices late Thursday in Hong Kong saying the ban on trading by U.S. entities of their Hong Kong shares should actually take effect 60 days after the companies’ names first appeared on the blacklist, which translates to March 9. The three frequently publish such notices in unison, as all are state-owned and frequently make major policy decisions in lockstep in accordance with directives from the country’s regulator. 

According to the announcements, the trio learned of the effective date for the U.S. ban through an announcement published on Wednesday in the U.S. by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). “The relevant prohibitions with respect to such entities added to the NS-CCMC List on Jan. 8, 2021 (i.e., CNOOC Ltd., China Mobile Ltd., China Telecom Corp. Ltd., China Unicom (Hong Kong) Ltd.) begin on March 9, 2021,” the announcement said. 

The New York Stock Exchange has moved to delist shares of all three stocks, based on its interpretation of the executive order and subsequent blacklisting of the three telcos. All three carriers said last week they would appeal the delisting decision, and a source close to one told Caixin the date for its hearing has been set for mid-April. 

Shares of the three telcos have been volatile since they were first blacklisted in January, since such a move effectively prohibits U.S. funds and individual investors from buying their stocks. The blacklisting led many global index compilers to dump the telcos from their indexes, since they were no longer eligible for investment by U.S. investors.

Contact reporter Yang Ge (geyang@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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