Chinese share prices hit rock bottom.
The Chinese share prices of telecommunications firms which are owned by China, have reached rock bottom, as a result of the announcement that they would be delisted by the NYSE. The move was made on the basis of an executive order of the United States, requiring sanctions against companies identified with links to the Chinese military.
However, Chinese securities industry officials said that with the small amount of shares traded in the US by these three companies, the impact for them is still limited and still capable of handling any problems.
Chinese share prices of major Chinese oil corporations – including CNOOC Ltd., also plunged on fears that they would be the next target of delisting in the US. CNOOC shares fell 5.7% on the Hong Kong trading floor today, the strongest decline since December 1. PetroChina Co. suffered a loss of 2.9% and China Petroleum, Chemical Corp. (Sinopec) also dropped 1.4% before recovering.
The NYSE’s move came at a request from President Trump in early November 2020, to ban the United States from investing in Chinese businesses owned or controlled by the military. The purpose is to put pressure on Beijing about its abuse of business practices.
Chinese share prices of the largest of the 3 companies, China Mobile Ltd., fell 4.5% to the lowest level since 2006. Meanwhile, China Telecom Corp. dropped 5.6%. Both companies recorded the strongest decline since mid-November. China Unicom Hong Kong Ltd. suffered a 3.8% loss. In addition, these 3 companies can also offset the revenue in China.
NYSE said depository receipts (ADR), of these three businesses, were suspended from January 7 to January 11, the delisting process also began.
The delisting move is just a symbolic move in the context of the growing geopolitical conflict between the two largest economies in the world, because these stocks have not been traded in large volumes at NYSE.
The bottom line – Chinese share prices hit rock bottom!