Business
Nasdaq to remove 4 Chinese companies’ shares from indexes after U.S. ban
Nasdaq said on Friday it will remove shares of four Chinese construction and manufacturing companies from indexes it maintains in response to a U.S. order restricting the purchase of their shares.
The securities, which are not traded on the Nasdaq exchange, will be removed from the indexes on Dec. 21.
They include China Communications Construction Co 601800.SS, China Railway Construction Corp 601186.SS, CRRC Corp 601766.SS, and Semiconductor Manufacturing International Corp 0981.HK.
A White House executive order last month barred U.S. investors from buying securities of blacklisted firms, starting in November 2021. The administration of President Donald Trump alleged the companies were linked to China’s military.
In protest, the Foreign Ministry spokeswoman Hua Chunying said on Dec. 4, “The U.S. should stop abusing national power and national security concepts to suppress foreign companies.” China condemned the move, saying the effort ran counter to principles of market competition.
A spokeswoman for index provider MSCI Inc MSCI.N said via e-mail on Friday the firm has spoken with clients about possible changes and will communicate “any necessary changes” soon.
Index FTSE Russell said on Dec. 4 it would delete shares of eight Chinese companies in light of moves by the White House.
S&P Dow Jones Indices announced on December 10 that it will phase out mainland listed A shares, Hong Kong-listed H shares, and US certificates of deposit (ADRs) from 10 companies, including Hangzhou Hikvision Digital. Technology Co Ltd of all stock indices before the market opens on December 21st.
The steps by the index providers show the practical impact of the U.S. order. U.S. investors often hold their China equity exposure in passive products built on broad indexes.
Chinese Foreign Ministry spokesman Zhao Lijian had previously said that China “firmly opposes the unprovoked suppression of Chinese companies by the United States.”What the United States is doing severely violates the principle of market competition and international norms for trade and investment that the U.S. claims to uphold, he had said in November.
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