Chinese telecom firms request another NYSE delisting reversal

(ATF) China Mobile, China Telecom and China Unicom have made an apparently coordinated request to the New York Stock Exchange (NYSE) to reverse an earlier decision to delist their shares, providing yet another twist to a confusing saga for investors.

The NYSE – after a series of bizarre policy reversals – delisted the three Chinese telecom firms earlier this month, following an executive order by former President Donald Trump that barred Americans from investing in public companies that Washington defined as having links with the Chinese military.

The US investment ban triggered fallout for the companies, with some investors selling their stakes, major American banks delisting some related structured products that were traded in Hong Kong and index providers culling the firms from their benchmarks.

Index providers FTSE Russell, MSCI and S&P Dow Jones removed the telcos from benchmark indices this month, wiping roughly $5.6 billion off the combined value of their Hong Kong-traded shares, and demonstrating the impact on related foreign markets of changes to US investing rules.

On Thursday January 21 the three Chinese telecom firms disclosed that they had requested a review of the decision by the NYSE the day before on January 20 – just as President Joe Biden was being sworn in to replace outgoing President Trump.

The three firms used almost identical language in their review requests.

“In order to protect the lawful rights of the company and its shareholders the company filed with the NYSE a written request for a review of the determination by a committee of the board of directors of the NYSE. According to the NYSE listed company manual, the review will be scheduled at least 25 business days from the date the request for review is filed,” China Mobile said in its announcement.

“The company requested that the committee reverse the determination and stay the trading suspension of the (shares) pending review of the determination. Investors are cautioned that there is no assurance that the company’s review request and stay request will be successful,” it added, with some understatement.

The NYSE did not make any immediate response to the request and the effect of the news on the Hong Kong-listed shares of the companies – which see the vast majority of liquidity in the three names – was muted.

China Mobile – the biggest of the three firms – was virtually unmoved, while China Telecom and China Unicom fell, but by less than 2%.