China telco shares lose 5% in first trading day since NYSE delisting announcement

Monitoring Desk

SHANGHAI (Reuters) -China’s three biggest telcos saw their shares drop as much as 5% in Hong Kong on Monday, the first trading session since the New York Stock Exchange (NYSE) said it would delist the firms under a plan China branded “political” and of “limited” impact.

The NYSE on Thursday said it would delist China Mobile Ltd, China Telecom Corp Ltd and China Unicom Hong Kong Ltd following the U.S. government’s move in November to block investment in 31 firms that it said are owned or controlled by China’s military.

The China Securities Regulatory Commission, in a question-and-answer posted on its website on Sunday, said the plan was “politically motivated”.

The move “completely disregards the actual situation of the relevant companies and the legitimate rights and interests of global investors and severely undermines normal market rules,” it said.

The American Deposit Receipts listed by the three telcos have a combined market value of under 20 billion yuan ($3.07 billion), or 2.2% of the firms’ equity, the regulator said.

“Even if delisted, the direct impact on the companies’ development and market operation is quite limited,” it said.

China Mobile’s shares fell as much as 4.5% in Hong Kong on Monday to HK$42.20, their lowest price since July 2007. China Telecom fell as much as 5.6% and China Unicom lost 3.4% versus a 0.8% rise in the benchmark Hang Seng Index.

Courtesy: Reuters