International index providers MSCI Ming Sheng and FTSE Russell announced the removal of three Chinese telecom operators, including China Mobile, China Telecom and China Unicom Hong Kong, effective today. The news said the shares of the three companies fell hard in response. China’s foreign ministry criticized the move today, saying the U.S. actions are short-sighted and will hurt U.S. interests.
Shares of three Chinese telecoms operators fell hard after international index providers MSCI Ming Sheng and FTSE Russell announced they would remove them from their indexes in response to a U.S. investment ban, Reuters reported from Shanghai today. The list of companies to be removed from global indices as a result of the U.S. government’s investment ban has expanded, and passive investors such as index-tracking funds are expected to have to get out of these stocks.
FTSE Russell said in a statement dated Jan. 7 that it would remove China Mobile, China Telecom and China Unicom Hong Kong from the FTSE Global Equity Index Series (GEIS), the FTSE Global China A-Share Inclusion Index and related indices, and MSCI Ming Sheng said it would do so as of Jan. 8.
The three stocks fell hard, with China Mobile opening at a near 15-year low, China Telecom falling to a 10-year low and China Unicom falling to a 10-month low. The losses narrowed later, but the three classes of stocks were still down 5-8% in early trading.
According to the report, the Trump administration issued an executive order last November barring Americans from investing in companies owned or controlled by the Chinese military.
FTSE Russell has already removed 11 other Chinese companies from its index, and MSCI Ming Sheng has removed nine. The New York Stock Exchange said Wednesday it will remove the American Depositary Receipts (ADRs) of China’s three largest telecom companies on Jan. 11.
Reuters said that on FTSE Russell will remove three Chinese telecoms from the global index, Chinese Foreign Ministry spokeswoman Hua Chunying said on Friday that the U.S. acted short-sightedly and will harm the U.S. interests.
According to the report, FTSE Russell International Index is the world’s second-largest index company of the British FTSE index company specializing in tracking global emerging market indicators, FTSE Russell (FTSE Russell) is a wholly owned company under the British London Exchange. The index covers about 7,400 stocks from 46 different countries, accounting for 98% of the total market capitalization of the global investable market and attracting over $1.5 trillion in global capital.
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