Receiving data from New York, shares of Chinese telecommunications businesses fell sharply
Shares of three Chinese telecommunications companies fell 5% on the first trading day of 2021 after the New York Stock Exchange announced that they would delist these businesses in the next few days.
|China Mobile is one of the three largest telecommunications companies in China about to be delisted by the New York Stock Exchange. Photo: AFP / VNA|
China Telecom Corp Limited, China Mobile Limited, and China Unicom Hong Kong Limited are the three largest telecommunications companies in China about to be delisted by the New York Stock Exchange, a move in the footsteps after the US administration issued the decree. It prohibits investments in 31 businesses that the US believes are owned or controlled by the Chinese military.
According to the decision of the New York Stock Exchange, transactions of three Chinese enterprises on sThis stock will be suspended on January 7 or no later than January 11, coinciding with the time when Trump’s investment ban took effect.
Previously, in November 2020, President Donald Trump signed a decree banning Americans from investing in businesses that the US has determined that are related to the Chinese military. This decree will take effect on January 11, just a few days before President-elect Joe Biden takes office.
In the content published on its website, the Securities Regulatory Commission of China (CSRC) said that the US plan has “political motives”. This committee assessed that the US move “completely disregards the current situation of three related businesses as well as the legitimate rights and interests of global investors, and at the same time, seriously undermines the information. market rate “.
According to the China Securities Regulatory Commission, custody certificates in the US (ADR) of the three above-mentioned Chinese telecommunications companies are worth less than 20 billion yuan ($ 3.07 billion), equal to 2.2% of the market capitalization of these firms.
“If it is delisted, the direct impact on the development and market performance of three Chinese companies is quite limited,” said the China Securities Regulatory Commission.
China Mobile shares traded in Hong Kong today 4/1 bottomed in July 2007, after falling 4.5% to HK $ 42.20 / share, while China Telecom and China Unicom shares respectively. decreased by 5.6% and 3.4%. Meanwhile, the Hong Kong stock market continued to stay in green this afternoon with the Hang Seng index increasing 0.89% to 27,472.81 points.
So far, all three Chinese telecommunications companies mentioned above have not received any notice of delisting from the New York Stock Exchange.
Commenting on the move of the US side, analysts of Citic Securities (Guangdong, China) said that the decision to cancel the listing of the New York Stock Exchange was not unexpected.
“US-listed shares of three Chinese telecommunications companies only account for an average of 1.5%, while their remaining shares listed in Hong Kong have very high liquidity and enterprises. Nor hasn’t had any fundraising operations in the past 20 years. A listing in the US will only put them at risk, “Citic Securities said.
According to Citic Securities experts, in recent years, it has become quite normal for Chinese enterprises to be delisted in the US or to choose a second listing in the Hong Kong market. Not only that, the delisting in the US market also creates an opportunity for three Chinese telecommunications companies to re-value their shares, while cutting costs of financial disclosure.
Over the past weeks, Washington continues to show a tough stance towards China. In December 2020, the US side added dozens of Chinese businesses to a blacklist of restricted trade transactions, accusing Beijing of using these businesses to exploit civilian technology for military.
China’s Ministry of Commerce on Monday said that the agency would take “necessary measures” to protect the interests of Chinese businesses.