The NYSE’s decision on whether the three large Chinese telecom state-owned companies can avoid delisting remains highly variable.
At the beginning of the new year, the NYSE announced that it was requiring the delisting of China Mobile, China Unicom and China Telecom from the NYSE pursuant to a U.S. presidential executive order. But three days later, on Jan. 4, the NYSE surprisingly reversed that decision, saying it would not move forward with the delisting plan and would allow the three companies’ stocks and bonds to continue trading on the NYSE.
However, on Wednesday (Jan. 6) came news that the NYSE’s decision to allow Chinese telecom companies to trade in the U.S. has caused dissatisfaction among the relevant authorities, and that the NYSE is considering whether to change its stance again and kick the Chinese SOEs off the NYSE. If this possibility turns out to be true, it will be another big reversal of the NYSE’s decision.
The Reuters news agency said the reason the NYSE reversed its decision on Monday to allow the Chinese companies to stay on the NYSE was because of some ambiguity in the president’s executive order prohibiting U.S. investment in Chinese companies identified as having a military background.
If the three Chinese companies are still found to be in compliance with the executive order, the original delisting plan will continue to be implemented, the source said.
U.S. financial media Bloomberg News also believes that the New York Stock Exchange could change its decision again. Bloomberg said U.S. Treasury Secretary Steve Mnuchin called NYSE President Stacey Cunningham on Tuesday to say he disagreed with NYSE’s decision to change the delisting.
Bloomberg said three people familiar with the matter disclosed that the NYSE is considering the issue of restarting the delisting process.
Bloomberg said the sources, who asked not to be named, said the administration officials pressuring the NYSE also included White House chief of staff Mark Meadows, national security adviser Robert O’Brien and presidential economic adviser Larry Kudlow.
Senator Marco Rubio, a Republican who advocates being tough on China, expressed outrage at the NYSE’s decision to retract the delisting.
Rubio tweeted, “This move to undermine the Executive Order is shocking if someone at (Treasury) did suggest (NYSE) change its decision to delist these Chinese companies!”
The U.S. Treasury Department did not comment on the NYSE’s decision.
Trump‘s executive order is scheduled to take effect on Jan. 11. If the next U.S. administration does not rescind the executive order, U.S. investment institutions and pension funds will have until Nov. 11 of this year to sell any securities they have in Chinese companies with ties to the military, as required by the executive order.
Over the past few months, hardliners in the Trump administration such as Secretary of State Mike Pompeo and trade adviser Navarro have been warning investors that some Chinese companies could be delisted from the U.S. stock market.
Last August, Keith Krach, a senior State Department official, wrote to U.S. universities asking them to sell their shares before the Chinese companies in question are delisted.
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