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Five Chinese giants will cease to be listed on the New York Stock Exchange, which ones and why?

Five Chinese giants will cease to be listed on the New York Stock Exchange, which ones and why?

Five major Chinese firms announced this Friday, August 12, that they will cease to be listed on the New York Stock Exchange, at a time when organizations from the Asian giant are under scrutiny by the US regulator.

In separate statements, oil companies Sinopec and PetroChina, insurance heavyweight China Life Insurance, aluminum giant Chalco, as well as Shanghai-based subsidiary Sinopec, They confirmed that they are initiating the procedures for a “voluntary withdrawal” from the New York Stock Exchange.

The withdrawal comes amid rising tensions between Beijing and Washington over US House Speaker Nancy Pelosi’s visit last week to Taiwan, an island China claims as part of its territory.

Beijing reacted angrily to the visit and carried out unprecedented military maneuvers around the autonomous island. Likewise, the Chinese executive suspended cooperation with Washington in areas such as climate change or the fight against drug trafficking.

The five companies were precisely on a list of companies published by the US regulator, the SEC, threatened with removal from Wall Street if they do not comply with the new audit requirements, which have been in force since the end of last year.

The five companies announced in separate statements that they expect their listing on Wall Street to end in early September. Each justified their decision by citing the costs of maintaining the listing in the United States, as well as the weight of meeting the new audit obligations.

In 2020, the US Congress passed a law specifically targeting Chinese companies, under which the Listed Company Accounting Oversight Board (PCAOB) was placed. a non-profit organization created by Congress itself) to be able to audit audits of foreign firms listed in the United States.

Mainland Chinese and Hong Kong companies are notorious for not submitting their financial reports to US-licensed auditors.

Chinese e-commerce giant Alibaba is on the list of more than 250 companies at risk of delisting in the United States.

China’s stock regulator said in turn that the five companies made the decision to withdraw from Wall Street based on their “own business criteria”.

The withdrawal “will not affect companies’ continued use of domestic and foreign capital markets for financing and development” of their activities, the Chinese regulator added in a statement.

It is worth remembering that this Wednesday, August 10, was a decisive day for the US stock market thanks to the inflation figures in the United States.

Investors in the stock market of Wall Street were relieved and hopeful, after the United States government announced that inflation in the United States had finally started to subside, after the fall registered in July thanks to the low in prices gasoline.

In this way, the New York Stock Exchange celebrated this Wednesday, August 10, that little by little the sight of a recession in the United States is disappearing and that the plans initiated by the Fed and the White House since March, to raise prices to historic levels, are apparently yielding results.

At the end of operations for the day, the Dow Jones index gained 1.63%, and the technology Nasdaq, which closed yesterday in negative territory, ended today with a strong rise of 2.89%. Finally, the optional Standard & Poors 500 rose 2.13%.

Inflation moderated slightly in the United States in July, according to official data published on Wednesday, thanks to Federal Reserve interest rate hikes to cool the economy and drop in gasoline prices.

The Consumer Price Index (CPI) fell to 8.5% in the 12 months to July, according to Labor Department figures, below market expectations. The data is a balm for President Joe Biden, a few months before the mid-term legislative elections in November.

* With information from AFP

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