Asia’s three biggest telcos saw their stocks drop up to 5% in Hong Kong on Monday, the trading that is first since the New York Stock Exchange (NYSE) said it could delist the firms under an agenda China branded “political” and of “limited” impact.
The NYSE upon said it could delist Asia Mobile (NYSE:CHL) Ltd, China Telecom (NYSE:CHA) Corp Ltd and China Unicom (NYSE:CHU) Hong Kong Ltd following a U.S. federal government’s move in November to block investment in 31 organizations it said are owned or managed by China’s military.
The Asia Securities Regulatory Commission, in a question-and-answer posted on its internet site on, said the plan was “politically inspired”.
The move “completely disregards the real situation for the relevant companies as well as the genuine legal rights and passions of global investors and severely undermines market that is normal,” it stated.
The United States Deposit Receipts listed by the 3 telcos have a combined market value of under 20 billion yuan ($3.07 billion), or 2.2% regarding the businesses’ equity, the regulator stated.
“Whether or not delisted, the impact that is direct the companies’ development and market procedure is very restricted,” it said.
Asia mobile phone’s shares fell around 4.5per cent in Hong Kong on Monday to HK$42.20, their price that is lowest since July 2007. Asia Telecom dropped around 5.6% and China Unicom destroyed 3.4% versus a 0.8% increase in the benchmark Hang Seng Index.
All three said that they had not received any notification that is delisting the NYSE.
In a considerable research note, Citic Securities analysts stated the delisting decision matched objectives.
“the 3 firms an average of only have 1.5percent of the stocks placed in the U.S. together with sleep in Hong Kong, have actually sufficient liquidity, and have now done any fundraising into the U.S. for 20 years. Having stocks listed in the U.S. will only pose more risk for them.”
Washington has stepped up its stance that is hard-line against in current days. In December, it included lots of Chinese businesses up to a trade blacklist, accusing Beijing of using them to harness technology that is civilian army purposes.
On Saturday, Asia’s business ministry stated it would take measures which are “necessary to safeguard Chinese organizations’ passions. Asia’s three biggest telcos saw their stocks drop up to 5%.
“In modern times it has been quite normal to see organizations being Chinese within the U.S. or have secondary listings in Hong Kong,” Citic analysts penned on Monday. “with all the delisting, the three Telcos will receive a possibility to have their stocks re-evaluated and reduce economic disclosure expense.”