China Stocks With US Listings Drop as NYSE Exit Gathers Pace




  • In Business
  • 2022-08-15 02:02:13Z
  • By Bloomberg

(Bloomberg) -- China's state-owned enterprises that plan to delist from US stock exchanges slid on Monday, as investors expected more firms to follow suit amid an auditing spat between the two nations.

Most Read from Bloomberg

  • Saudi Billionaire Made $500 Million Russia Bet Near War's Onset

  • How the US Toppled the World's Most Powerful Gold Trader

  • Ukraine Latest: First UN Wheat Cargo Sets Sail for Ethiopia

  • US Lawmakers Visit Taiwan After Pelosi Trip Infuriates China

  • Anshu Jain, Deutsche Bank Chief in a Pivotal Era, Dies at 59

China Life Insurance Co. dropped as much as 2.2% in Hong Kong, while Aluminum Corp of China Ltd. and China Petroleum & Chemical Corp. lost 2.4% each. Sinopec Shanghai Petrochemical Co Ltd. and PetroChina Co. also fell. The moves follow a drop in their American Depositary Receipts on Friday.

Friday statements from the five firms were seen as reflecting rising US-China tension and a lack of progress in reaching agreement over giving American regulators better access to Chinese firms' financial data. Analysts expect the developments to hurt sentiment but see little material impact, given the stocks' modest US trading volume and as they can still get international funding via the Hong Kong market.

"We expect market sentiment might be dampened, as more inactively traded ADSs of Chinese SOEs may follow the delisting," Citigroup Inc. analysts including Michelle Ma wrote in note. Still, they said negative impact should be "immaterial" as only a small portion of the securities are traded in the US, they said in a report commenting on China Life.

Jefferies Financial Group Inc. analysts saw this "voluntary delisting" as a sign that China has started a screening process to decide which companies they don't want to be subject to US audit investigations.

"This is likely a sign that China's 'selection process' has started, instead of a sign that there is no deal," analysts including Edison Lee wrote in note. "We believe China is setting up a mechanism for it to screen out those companies that they do not want US-listed. Those that pass the test will then be allowed to comply with the SEC audit investigation requirements."

The Chinese securities watchdog has denied a media report that they plan to group companies into three categories to avoid delisting. On Friday, it said the companies' delistings are based on their own business decisions.

Hong Kong's benchmark Hang Seng Index was up as much as 0.4% on Monday, while China's CSI 300 index climbed 0.7%.

(Updates with share performances)

Most Read from Bloomberg Businessweek

  • The Work-From-Home Revolution Is Also a Trap for Women

  • Mark Zuckerberg's Sheryl Sandberg Replacement Has Long Been Meta's Top Fixer

  • Booming Beef Industry Has Urban Cowboys Lining Up to Buy Cattle in Uruguay

  • How Employers Benefit From Offering Unlimited Paid Time Off

  • The Rise of the LinkedIn B2B Influencer

©2022 Bloomberg L.P.

COMMENTS

More Related News

China
China's $5 Trillion Rout Creates Historic Gap With Indian Stocks

(Bloomberg) -- The relentless plunge in China's stocks has burnished the appeal of their biggest emerging-market rival India, spurring a divergence that's...

Moderna refused China request to reveal vaccine technology - FT
Moderna refused China request to reveal vaccine technology - FT
  • US
  • 2022-10-02 00:05:26Z

The Cambridge, Massachusetts-based pharmaceutical company turned down China's request to hand over the recipe for its mRNA vaccine because of commercial and ...

RWE to Buy Con Edison Clean Energy Unit for $6.8 Billion
RWE to Buy Con Edison Clean Energy Unit for $6.8 Billion

(Bloomberg) -- German utility RWE AG agreed to buy Consolidated Edison Inc.'s renewable energy assets for $6.8 billion, in one of the biggest green deals in ...

World Economy Roiled by Simultaneous Shocks Echoing 2007 Anxiety
World Economy Roiled by Simultaneous Shocks Echoing 2007 Anxiety

(Bloomberg) -- The world economy is showing signs of a rapid downshift as it contends with a series of shocks -- some of them self-inflicted by policymakers ...

What the war in Ukraine means for Asia
What the war in Ukraine means for Asia's climate goals
  • World
  • 2022-10-01 22:18:58Z

The queues outside petrol pumps in Sri Lanka have lessened, but not the anxiety. But for developing countries with already-strained finances, the war is...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Business