• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Global Equity

Chinese Telecoms Dented in Hong Kong as NYSE Moves to Remove Them

The New York Stock Exchange will delist China Mobile, China Telecom and China Unicom - all top 20 telecoms globally - by January 11.
By ALEX FREW MCMILLAN
Jan 04, 2021 | 07:00 AM EST
Stocks quotes in this article: CHL, CHA, CHU, ORCL, CHTR, SIRI, DISH, BABA

The shares of the U.S.-listed Chinese mobile-phone providers China Mobile (CHL) , China Telecom (CHA) and China Unicom (CHU) tanked in Hong Kong trade on Monday. It's the first trading day for investors to respond to the decision of the New York Stock Exchange to delist the companies.

The NYSE said on New Year's Eve that it plans to take the companies off the Big Board. It's a move precipitated by the decision by the United States to classify the telcos as three of the 31 companies with ownership ties or control linked to the Chinese military.

The China Securities Regulatory Commission, the equivalent of the U.S. Securities and Exchange Commission, countered on its Web site that the move is "politically motivated." Which, while many makers of network equipment count military contracts as part of normal business, of course it is.

The decision "completely disregards the actual situation of the relevant companies and the legitimate rights and interests of global investors and severely undermines normal market rules," the CSRC said.

These are major companies, the three biggest phone providers in China. They have together built out the world's largest network, so far, of 5G telecom towers, and all rank among the world's 20-largest phone companies.

China Mobile at US$116.7 billion is equivalent in size to Oracle (ORCL) or Charter Communications (CHTR) , making it the sixth-largest telecom in the world. China Telecom at US$22.5 billion is about the size of the radio conglomerate Sirius XM (SIRI) . China Unicom at US$17.6 billion is similar to the satellite TV provider Dish Network (DISH) .

The three companies say they haven't been issued formal notice by the NYSE, yet. The NYSE said it plans to delist the three state-owned companies by January 11. It cited the executive order issued in November by President Trump that bars U.S. investors from buying stock in companies designated as being tied to the People's Liberation Army.

That will certainly make life difficult for funds that invest in global telecom or tech. The three companies are all also listed in Hong Kong, where investors would have to get their exposure.

China Mobile opened 4.5% lower, although it ended the day with only a 0.8% loss. I wouldn't be surprised if China's central bank or other state-directed investors bought it up to make the day appear less damaging.

China Telecom was off 2.8% on Monday. China Unicom fell 1.8% before a suspicious late-day surge that saw it finish with a 0.5% gain.

Citic Securities analysts said in a research note that the three companies have on average only 1.5% of their shares listed in the United States, and have not raised capital there for 20 years. So having shares listed on U.S. exchanges "will only pose more risk for them," the brokerage said.

But it is an embarrassing forced withdrawal from what's still the world's most liquid and deepest pool of capital. An NYSE listing was for years the gold standard for Chinese companies, an official recognition that they had made it onto the world stage.

Chinese companies are valued more highly when they're listed nearer home, however, in Hong Kong or the walled-off markets in Shanghai and Shenzhen. There's been a string of U.S.-listed Chinese companies, led by Alibaba Group Holdings (BABA) , that have conducted secondary listings in Hong Kong recently, preparing for the potential for them to be forced out of the direct reach of U.S. investors, too. While companies like Alibaba have not been designated military-linked, they will have to meet U.S. accounting-standards requirements in order to sustain their U.S. listings, if they choose to remain. Others will take their U.S. listing, and run.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Alex Frew McMillan had no position in the securities mentioned.

TAGS: Investing | Markets | Stocks | Trading | Technology | Telecommunications | China | Telecom Services | Global Equity

More from Global Equity

Steve Wynn Accused of Working for China to Lobby Trump

Alex Frew McMillan
May 18, 2022 9:30 AM EDT

If Elon Musk proceeds to buy Twitter, he would surely face censorship pressure stemming from Tesla's Shanghai factory, as Steve Wynn's experience shows.

Here Are Ways to Gain Emerging Market Exposure While Sidestepping China Risk

Mark Abssy
May 17, 2022 11:15 AM EDT

If you'd prefer to avoid the headline risk that comes with investing in China, here are a couple ETFs to consider.

China's Economy Could Be Shrinking as Big-Ticket Purchases Stop

Alex Frew McMillan
May 16, 2022 6:14 AM EDT

China's government is more concerned about stopping the spread of Covid-19 than spurring the economy back to life.

Korean Stocks Promise Upside if External Factors Ease

Alex Frew McMillan
May 13, 2022 6:39 AM EDT

The Kospi has shown dramatic volatility in the last year, but Seoul stocks now look undervalued, particularly those in in-demand sectors.

China Faces 'Tsunami' of Covid Infection That Could Swamp the System

Alex Frew McMillan
May 11, 2022 9:00 AM EDT

A new study suggests 1.55 million people could die if China abandons zero-Covid, with the intensive-care system needing 15.6 times existing capacity.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 01:44 PM EDT STEPHEN GUILFOYLE

    Stocks Under $10 Portfolio

    We're making a series of trades here.
  • 03:07 PM EDT PAUL PRICE

    Why Is Walmart Down Big Today?

    Besides its poor earnings report Walmart was way...
  • 07:14 PM EDT PAUL PRICE

    A New, Very Scary Movie

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login