Skip to main content

Shares of Chinese telecom giants soar after NYSE makes a u-turn

By: Invezz
Dow Jones, S&P 500, and Nasdaq reached record highs on expectations for a new fiscal stimulus

The New York Stock Exchange (NYSE) dropped its plan to delist three Chinese telecom companies including China Telecom (NYSE: CHA), China Mobile (NYSE: CHL) and China Unicom (NYSE: CHU), just four days after it announced its decision. 

Fundamental analysis: An unexpected change in the direction

The world’s largest stock exchange said it reconsidered its decision following “further consultation with relevant regulatory authorities in connection with the Office of Foreign Assets Control.”

Just four days earlier, the exchange announced its decision to delist shares of those three companies, in accordance with the executive order issued by President Donald Trump signed in November, which sought to prevent U.S. companies from investing in companies that the U.S. government alleged aid of the Chinese military.

Popular stock indices including MSCI, S&P Dow Jones Indices and FTSE Russell and the trading application Robinhood have also announced they will take measures to abide by the executive order. 

On Monday, the China Securities Regulatory Commission said the order was predicated on “political purposes” and “entirely ignored the actual situations of relevant companies and the legitimate rights of the global investors, and severely damaged market rule and order.”

Oppositely, FTSE Russell said it will delist three Chinese firms from its global equity indexes, including China United Network Communications, Semiconductor Manufacturing International Corporation (SMIC) and Nanjing Panda Electronics. 

The three companies will be deleted from FTSE Russell’s FTSE Global Equity Index Series and the FTSE Global China A Inclusion Indexes. The U.K. stock market indices provider also said it will delete China’s largest microchip company SIMC from its FTSE China 50 Index and video security company Hangzhou Hikvision Digital Technology from its FTSE China A50.

Technical analysis: Shares soar

Shares of the three telecommunication giants surged in after the announcement. China Unicom share price soared about 16% in pre-market trading on Tuesday to erase losses recorded since the mid-November. 

China Unicom weekly chart (TradingView)

Similarly, China Telecom stock price is up over 10% just a day after hitting an all-time of $24.10. Finally, shares of China Mobile are trading 11% higher. 

Summary

The New York Stock Exchange said it reversed its initial decision to delist three telecommunication companies from China after further discussions with regulatory authorities. In response, shares of three companies soared higher.

The post Shares of Chinese telecom giants soar after NYSE makes a u-turn appeared first on Invezz.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.