Quantitative hedge fund managers including Renaissance Technologies, Dimensional Fund Advisors and Two Sigma Investments were among the largest holders in the three Chinese telecom companies being delisted by the New York Stock Exchange to comply with a U.S. executive order that imposed restrictions on companies identified as affiliated with the Chinese military, the People's Liberation Army.
But the stakes they held at the end of September were small, 13F filings show, Bloomberg reports.
The New York Stock Exchange said it will delist three Chinese corporations to comply with a U.S. executive order that imposed restrictions on companies identified as affiliated with the Chinese military.
China Mobile Ltd., China Telecom Corp Ltd., China Unicom Hong Kong Ltd. will be suspended from trading between January 7 and January 11, and proceedings to delist them have started, according to a statement by the exchange.
In response, China’s Ministry of Commerce said on Saturday that necessary actions will be taken to protect the rights of Chinese companies and hopes the two countries can work together to create a fair, predicable environment for businesses and investors.
The three Chinese companies have separate listings in Hong Kong.
All generate the entirety of their revenue in China and have no meaningful presence in the U.S. except for their listings there.
Their shares are also thinly traded on the New York Stock Exchange compared to their primary listings in Hong Kong, making this NYSE delisting more of a symbolic blow amid heightened geopolitical friction between the U.S. and China.
U.S. President Donald Trump signed an order in November barring American investments in Chinese firms owned or controlled by the military, in a bid to pressure Beijing over what it views as abusive business practices. The order prohibited U.S. investors from buying and selling shares in a list of Chinese companies designated by the Pentagon as having military ties.
The Chinese Foreign Ministry later accused the U.S. of “viciously slandering” its military-civilian integration policies and vowed to protect the country’s companies. Chinese officials have also threatened to respond to previous Trump administration actions with their own blacklist of U.S. companies.
The executive order has resulted in a series of companies being removed from indexes compiled by MSCI Inc., S&P Dow Jones Global Indices and FTSE Russell.
The U.S. Federal Communications Commission in May barred China Mobile from operating in the U.S.
In December, it ordered carriers to remove equipment made by Huawei Technologies Co., and begun looking into whether China Telecom should be allowed to operate in the country. China Telecom’s U.S. unit told the FCC in a June 8 filing that it’s an independent business based in the U.S. and not subject to Chinese government control.