The New York Stock Exchange took its time in complying with the executive order passed by the Trump Administration. However, as soon as it went ahead with the implementation of the order, by delisting three Chinese companies, American companies are following suit by pulling out of Chinese firms. BlackRock, the world’s biggest money manager, has been selling stakes in three Chinese telecommunication providers after the US put them on its sanctions list and an investment ban kicked in from this week.
The company said, “iShares ETFs have adjusted and will continue to be responsive in accordance with their respective indexes’ treatment of securities impacted by recent US sanctions on certain Chinese companies”.
“Our funds continue to function as designed, seeking to track the performance of their indexes, trading efficiently and offering daily transparency to holdings,” it added.
The American companies, under the directives of President Trump, are taking this action, in a face of a counter-measure from the Chinese side. Notwithstanding the Chinese orders, the US companies are folding their investments in China, as well as, in the Chinese companies.
Earlier the NYSE had changed its position twice. According to statements from the NYSE, both reversals have been prompted by additional guidance given by the Treasury Department’s Office of Foreign Assets Control (OFAC). This means that China has been putting pressure on the Wall Street big shots to reverse the executive order and the fact that OFAC was involved, tells the depth of Chinese influence in the USA.
Shares in the Chinese telecoms: China Mobile, China Unicom Hong Kong and China Telecom were dragged along for the ride. The value of these shares plunged as much as 5% on Monday, regaining lost ground on Tuesday, and falling again Wednesday. As the NYSE has agreed with the executive order of Trump, the trading in the three companies in the U.S. has been halted as of Jan. 11.
After Trump’s directives came into effect, companies are lining to disinvest from the Chinese telecom firms. In addition to BlackRock, other fund managers too, are rushing to comply with Trump’s order. Wheaton, Illinois-based First Trust on Monday filed a supplement to the prospectus for several funds that hold these stocks, including First Trust Nasdaq Technology Dividend Index Fund, saying the companies cited in the order would be removed from their portfolios. Goldman Sachs, Morgan Stanley and JPMorgan plan to delist 500 structured products in Hong Kong, recent filings show, as reported by SCMP.
As per the same SCMP report, the US$14 billion Tracker Fund, Hong Kong’s most actively traded ETF managed by State Street Global Advisors Asia, won’t make new investments in companies covered by the US ban under Trump administration’s directives, saying the ETF is no longer appropriate for US investors.
All these updates regarding the companies moving out their investments from the Chinese companies, tell us that the USA still holds the upper hand and going ahead, these actions by President Donald Trump are going to hurt Chinese economy even more.
While the effectiveness of these bans by Trump administration’s directives will be visible in the long run, the fact that Chinese companies are being delisted one after another and CCP could not do anything must be really embarrassing for them.