In A Major U-Turn, NYSE Says Will Not Delist China's Major Telecom Operators

In an unorthodox twist, Intercontinental Exchange Inc ICE-owned New York Stock Exchange is reversing its decision to delist China Mobile Ltd. (NYSE: CHL), China Telecom Corporation Limited (NYSE: CHA), and China Unicom Hong Kong Limited (NYSE: CHU).

On Monday, the exchange said that “in light of further consultation with relevant regulatory authorities,” it no longer intends to carry on with the delisting plan, Bloomberg reports.

What Happened: NYSE’s u-turn comes without much explanation just four days after it decided to comply with outgoing President Donald Trump’s order issued on Nov. 12, barring American investment in publicly traded companies that are associated with the Chinese military. 

After NYSE’s decision to delist, China had threatened retaliation. “China opposes the Americans from abusing national security by listing Chinese companies into the so-called ‘Communist China Military Companies’ list and will take the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies,” a Chinese Commerce Ministry spokesperson had said in a statement to the Associated Press.

Why It Matters: Major stock index giants like MSCI, S&P Dow Jones Indices, and FTSE Russell, as well as popular trading app Robinhood, had complied with the order and removed certain Chinese securities, as per CNBC.

“Some funds that had an obligation to unload these shares will now need to buy them back. Some investors are also starting to pricing in a scenario that the decision to halt delistings could be a start of a de-escalation in tensions between China and the U.S,” Jackson Wong, director of asset management at Amber Hill Capital Ltd in Hong Kong told Bloomberg.

NYSE’s lack of clarity has left investors to speculate if NYSE had misinterpreted the executive order or has broader geopolitical implications.

Price Action: CHL shares fell 5.9% to $26.86 on Monday. All three telecom stocks gained more than 7% Tuesday in Hong Kong.

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