October 7, 2022

Five State-Run Chinese Giants to Delist From U.S. Stock Exchanges

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Five of China’s largest state-owned companies, representing hundreds of billions of dollars in market value, will delist from the New York Stock Exchange in the coming weeks, the firms said in a wave of filings on Friday.

Among the world’s three largest energy firms, Petro China, Sinopec And Shanghai Petrochemicalsaid in separate statements that it would apply for a voluntary delisting of its American depository shares. Two other government companies, insurers China Life and aluminum producers come onalso said it would stop offering its shares in the US, citing administrative burdens and costs associated with holding shares.

The companies’ share prices fell during trading in New York on Friday, mostly around 1 percent. Together, the companies have a combined market value of more than $300 billion.

He made his announcement amid heightened tensions between Beijing and Washington and increased scrutiny of Chinese companies listed in the US since the congressional approval. Legislation Introduction of strict supervision of these firms in 2020.

US lawmakers have long complained that Chinese companies do not follow the same rules as other companies on US stock exchanges. Despite years of talks, Beijing and Washington have failed to reach an agreement that would give US regulators access to fully inspect the audit papers of Chinese enterprises listed in the US.

The Wall Street listing, with its deep investor base and liquid market, was once seen as a coveted spot for China’s biggest companies and a key stepping stone for those looking to go global.

But tensions between China and the US have spilled over into almost every aspect of the relationship between the two countries, from defense to climate and finance. Oh Controversial journey Relations were further inflamed by Speaker Nancy Pelosi’s announcement last week of Taiwan, which China claims as its own. A few hours after his visit, Beijing Conversation stopped on military cooperation, climate change and other issues.

China’s market regulator said the steps would not “jeopardize” fundraising activities by the five firms, adding that they could choose from multiple markets. Companies will maintain their listings in Hong Kong and mainland China.

The China Securities Regulatory Commission said in a statement that “these companies have strictly complied with the requirements of the US capital market regulations since their listing in the US and chose to delist for their business concerns.” ” Statement on Friday.

All five companies were added to a list of Chinese firms that did not meet U.S. regulators’ auditing standards, outlined in the Holding Foreign Companies Accountability Act that was passed in 2020.

Alibaba, the New York-listed Chinese e-commerce giant, is another firm recently added to the list of more than 270 companies. Shares in its U.S. listing fell 11 percent when news of its raise emerged this month. The company said last month that it would happen soon. Find a basic list. in Hong Kong, a move that will allow more investors from mainland China to invest in it.

Didi Chuxing, China’s answer to Uber, was among the first Chinese companies to announce plans to delist from the New York Stock Exchange. At the end of last year, Signaling the end of the multi-year, trillion-dollar love affair between China and Wall Street.

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