The New York Stock Exchange (NYSE) has thrown out its decision on the delisting of three Chinese telecoms firms.
The delisting of these Chinese telecoms from the NYSE 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.
The delisting of China Mobile, China Telecom and China Unicom was previously announced by the NYSE on December 31. However, the NYSE claims that it discarded its previous decision based on "further consultation" with regulatory authorities.
Trump's executive order
On November 12, 2020, President Trump issued an 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 which the NYSE delisted several days ago.
Prior to this, Trump also issued executive orders back in August 2020, which bans TikTok and WeChat in the US if not sold by their Chinese-owned parent companies.
The TikTok order stated that after 45 days, "any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd.," will be prohibited.
The order also makes the accusation that the social media platform "automatically captures vast swaths of information from its users," such as location data and browsing and search histories, which "threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage."
Meanwhile, the executive order issued for Tencent-owned WeChat, which allows its users to transfer funds to each other, states that financial transactions with Tencent will be banned.
The order prohibits "any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order."
Change in NYSE decision
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.
Following the announcement, shares of all three telecoms went up on the Hong Kong stock exchange, following significant falls recently. All three firms are dual listed in New York and Hong Kong.
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.
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."
