Chinese Telecoms Stocks Down as NYSE Reconfirms Delisting

Another day, another decision in the Sino-American seesaw stock game.
CapitalWatch StaffJan 06,2021,15:57

China’s top telecoms will be delisted after all. The New York Stock Exchange has scheduled the suspension for early Jan. 11 of China Telecom Corp. Ltd. (NYSE: CHA; HKEX: 0728), China Mobile Ltd (NYSE: CHL; HKEX: 0941) and China Unicom Hong Kong Ltd. (NYSE: CHU; HKEX: 0762).

The stock exchange first announced the plan last week, then reversed its decision on Monday. However, after Treasury Secretary Steven Mnuchin phoned the NYSE saying he disagrees with the reprieve, the move was put on tracks again.

Wednesday morning in New York, China Telecom was down 3%, and China Mobile and Unicom both dropped 2%.

The delisting follows the order Trump signed in November that bans U.S. investment in companies it alleged are owned or controlled by Chinese military. Earlier, China condemned the move and followed with threats of its own, saying on Saturday that countermeasures will follow, though it didn’t specify on what they will be.

In three separate filings with market operator Hong Kong Exchanges and Clearing (HKEX) on Monday, the three telecom companies said that investors can deposit their ADS holdings with the Bank of New York Mellon and receive Hong Kong shares in return. While the share swap was not to be a one-for-one swap, the monetary value of a shareholder’s position would remain roughly the same.

The question is now on whether a re-re-reversal will follow.

Potentially, the next to face delisting may be oil stocks CNOOC Ltd. (NYSE: CEO; HKEX: 0883), PetroChina (NYSE: PTR; HKEX: 0857), and Sinopec, or China Petroleum and Chemical Corp. (NYSE: SNP; HKEX: 0386).