One day after U-turning on its late-December decision to delist three Chinese telecom companies from its exchange, the New York Stock Exchange U-turned again on Wednesday and announced it would, after all, delist the three companies.
“If you are confused, so am I and it seems like the dying days of the Trump Administration will feature more last shots at China, like the Alipay ban yesterday,” Jeffrey Halley, senior market analyst at Oanda, said in a note, referring to a Trump executive order that banned U.S. transactions with eight digital Chinese payment platforms, including Ant Group’s Alipay.
Shares in the Chinese telecoms—China Mobile, China Unicom Hong Kong and China Telecom—were dragged along for the ride, plunging as much as 5% on Monday, regaining lost ground on Tuesday, and falling again Wednesday. Trading in the three companies in the U.S. will be halted as of Jan. 11.
The delisting saga was prompted by an executive order President Donald Trump signed last November, forbidding U.S. markets from housing what the White House dubs “Communist Chinese military companies.” The executive order set a deadline of Jan. 11 for such companies to be booted out of the U.S. markets.
In December, the Treasury Department released a list of 35 companies classified as “Communist Chinese military” firms, and on Dec. 31, the NYSE moved to delist the three companies included on both the list and its, bourse—China Mobile, China Unicom and China Telecom. Then the flip-flopping began.
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), seemingly on the question of whether the executive order bans only the companies detailed by the Treasury Department or their subsidiaries, too.
On Wednesday, as the NYSE got back on course with delisting the three telecoms, the OFAC posted an update to its FAQs on “Chinese Military Companies Sanctions,” stating that, yes, the sanctions do apply to subsidiaries of the named companies too.
Florida Republican Sen. Marco Rubio, who condemned the NYSE’s initial backtrack on Twitter, appeared to take some credit for the NYSE’s latest return to delisting the Chinese companies. In a statement, Rubio said he was “pleased that the NYSE decided to reverse their earlier announcement” after an “intense pressure campaign” from Rubio and his peers.