China downplays impact of NYSE operator delistings - Mobile World Live

China downplays impact of NYSE operator delistings

04 JAN 2021

China’s stock market regulator called the delisting of China Mobile, China Telecom and China Unicom securities on the New York Stock Exchange (NYSE) politically driven and claimed the move would have limited impact on the companies’ growth and general market performance.

In a statement issued yesterday (3 January), The China Securities Regulatory Commission (CSRC) said the size of companies’ American Deposit Receipt (ADR) listings remains less than 2.2 per cent of their total equity, with a market capitalisation of less than CNY20 billion ($3.09 billion).

“The liquidity, trading volume and fund-raising functions of the ADRs have been relatively low, therefore the direct impact of a potential delisting would be rather limited.”

NYSE announced last week it would delist the securities of China’s three major telecoms operators by 11 January to comply with an executive order issued by President Donald Trump in November, blocking US investment in companies the Department of Defence claimed are owned or controlled by the Chinese military.

CSRC condemned the order, which “entirely ignored the actual situation of the relevant companies and the legitimate rights of global investors, and severely damaged market rule and order”.

Planned action
The watchdog added it supports the companies in safeguarding their legitimate rights, and believes they are able to properly handle any negative impact caused by the executive order and potential delisting.

The three operators today issued similar statements, with market leader China Mobile saying it regrets the NYSE’s decision, and will conduct an investigation and strengthen its communication and liaison with the regulatory authorities of its listing venues, with a view to protecting its rights and those of holders of its securities.

In late December, the Chinese Ministry of Commerce said in a statement the country strongly opposes the ban on US investment in certain domestic companies and will take necessary measures to protect the rights of Chinese companies.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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