The three Chinese telecom giants are asking the New York Stock Exchange (NYSE) to review its decision regarding their delisting.
The NYSE decided on the delisting of Chinese telecom companies, China Unicom, China Mobile and China Telecom, two weeks ago after previously announcing that it has thrown out its decision to delist them.
The delisting was a result of President Donald Trump’s executive order in November, which prohibits US investments in Chinese firms owned or controlled by the military.
Turnabouts by the NYSE
On January 4, the NYSE said it has abandoned its previous decision to delist the three Chinese telecoms stocks. The delisting of China Mobile, China Telecom and China Unicom was previously announced by the NYSE on December 31.
The original decision was based on former President Donald Trump's executive order which prohibited "any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Communist Chinese military company by any US person."
The US Department of Defense came up with a list of Chinese companies it deemed to have military ties. The list included the three Chinese telecoms.
Regarding the NYSE’s first decision to abandon the delisting, Jeffrey Halley, a senior market analyst from Oanda, argued: "I suspect that the NYSE never wanted to delist these stocks in the first place. They acted on guidance regarding the executive order."
"That interpretation has clearly changed and the NYSE has moved quickly to change course," he continued.
Halley concluded: "These are the acts of a dying administration and China will probably be content to await President Biden, and more clarity then over the general path of US China relations from the new administration."
However, the exchange announced a few days later that it will go back to its original decision of delisting the aforementioned companies due to "new specific guidance" from the US Treasury Department that was delivered on Tuesday.
The rescindment of the delisting boosted share prices of the telecoms firms. Shares of China Unicom surged by 8.5%, while China Telecom increased by 8%. On the other hand, China Mobile’s stock rebounded by 7% after the NYSE announcement.
But the new decision caused China Telecom’s stock to fall by 3.7%, while China Mobile went down by 2.7%. Shares in China Unicom declined by 2.3%.
According to the Chinese government, the US is "wantonly suppressing foreign companies listed in the country" and that it will take "necessary measures" to protect the interests of Chinese firms.
Appealing the delisting
The three state-backed telecoms companies issued near-identical statements saying they "had complied strictly with the laws and regulations, market rules as well as regulatory requirements".
They requested a review from the NYSE immediately after Trump's departure from the White House.
The three telecoms earn all of their revenue in China and have no significant presence in the US but they have a dual listing in the US and Hong Kong, similar to other large Chinese companies.
Currently, there are over 200 Chinese companies listed on US stock markets with a total market capitalization of $2.2 trillion.
