The New York Stock Exchange said on January7th it now will delist three Chinese telecom companies a day after US TreasurySecretary Steve Mnuchin told the NYSE president that he disagreed with an earlierdecision to reverse the delistings.

The latest move, which is effective onJanuary 4th, marks the third time in less than a week that the NYSE has actedon the matter.

The flip-flopping highlights the confusionover which firms were included in an executive order issued by President DonaldTrump in November barring Americans from investing in 35 companies thatWashington deems to be associated with the Chinese military.

China's three telecom giants, China Mobile,China Telecom and China Unicom said in their respective announcements to theHong Kong Exchanges and Clearing on January 4th that they have not receivednotification from the New York Stock Exchange (NYSE) on its decision to delisttheir American Depositary Shares (ADSs).

The NYSE would suspend trading in shares ofthe three Chinese telecom companies between January 7 and January 11, andproceedings to delist them have started, the exchange announced on December 31.

NYSEflipflops again on plan to delist Chinese telecom giants

The NYSE originally announced on Dec 31,New Year's Eve, that it would delist China Mobile Ltd, China Telecom Corp Ltdand China Unicom Hong Kong Ltd. On Monday, after consulting with regulators inconnection with the US Treasury's Office of Foreign Assets Control, it decidedinstead to keep them listed.

The decision made in January 7th marks areturn to the original plan.

The on-again-off-again-on-again gyrationsmade for a volatile week in the three stocks. Two of the companies, ChinaMobile and China Unicom, have been listed on the NYSE since 1997.

It also comes amid an increase in actionsaimed at high-profile Chinese companies and software apps in the last days ofthe Trump administration, including TikTok, WeChat and Alipay.

Derrick Early, an aerospace engineer in Maryland,told The Wall Street Journal that he sold China Mobile shares on January 4th ata loss when it appeared that they would be delisted, so he missed out when thestock rallied more than 9 percent the next day.

"I'm so cross with President Trump onthe ban, and I'm cross with NYSE on whipsawing their delisting policy," hesaid.

"It's odd for the NYSE to get this sowrong," said Bloomberg Intelligence analyst Larry Tabb. "Theirmarketing and public relations team has historically been one of the best. It'sbad enough to do a 180 on this within a week, but to go 360 degrees on such amajor move so quickly means that they either got this terribly wrong, or therewas significant outside pressure driving these decisions."

"There are a lot of political appointeeswho believe it is their job to push as much anti-China action out before theyleave the building, in part to box in the next administration," ScottFlicker, a partner at law firm Paul Hastings, told the Financial Times."As a practical matter that won't necessarily happen."

Mnuchin has long been perceived as opposedto call by hardliners in the administration, particularly in the StateDepartment, to crack down on Chinese companies.

But sources who asked to remain anonymoussaid Mnuchin had called NYSE President Stacey Cunningham on January 5th toexpress his concerns over the decision to relist the companies, as the exchangesought further confirmation on the matter.

Some of the confusion seemed to stem fromwhether subsidiaries of the 35 companies named should be included in thedelistings.

"The Treasury secretary was on thephone with the NYSE (president) now and was told that NYSE would reverse theirdecision," a US official told Reuters on Tuesday.

On January 7th, the exchange operator saidin a statement its latest decision, to move forward with the delistings, wasbased on "new specific guidance received on January 5, 2021, that theDepartment of Treasury's Office of Foreign Assets Control".

Leland Miller, the CEO of the US-basedconsultancy China Beige Book, said: "There is a unique situation wherethere is an outgoing administration that is disengaged and (there are) orderssitting out there, so something has to be done, but no one wants to take onresponsibility. I think in the future that anyone getting these orders willsay: 'Tell us exactly what you want us to do,' and force administrations to bemore focused."

Trading in the securities will be suspendedat 4 am ET, Monday, Jan 11, the NYSE said.

"After an intense pressure campaignfrom those of us who believe we should prioritize the interests of Americanworkers and mom and pop investors above Beijing and Wall Street, I am pleasedthat the NYSE decided to reverse their earlier announcement," RepublicanSenator Marco Rubio of Florida, a frequent critic of China, said in astatement.

"The NYSE is trying to judge how thepolitical winds are blowing, and it's a pretty confusing situation rightnow," Dan David, founder of Wolfpack Research, told the Journal.

NYSE-owner Intercontinental Exchange Inc(ICE) is run by billionaire Jeffrey Sprecher. His wife, Kelly Loeffler, also aformer ICE executive and a Republican US senator, lost a runoff election forthe seat on Tuesday in Georgia to Raphael Warnock.

Reversalsby NYSE harm image of financial hub

The New York Stock Exchange's two reversalswithin a week over its decision to delist three Chinese telecom companies harmits image as a global financial hub, officials and experts said on January 7th.

The latest move highlights confusion overhow to implement the executive order issued by the US president in Novemberbarring Americans from investing in over 30 companies that are alleged to beassociated with the Chinese military, experts added.

Foreign Ministry spokeswoman Hua Chunyingon January 7th quoted comments from Japan's Nikkei financial newspaper that theNYSE's frequent changes on the delisting decision are causing chaos in thecapital market.

By doing so, the US government isultimately harming its own national interest and image. The status andcredibility of the US as a global capital market will also inevitably be erodedand damaged, Hua said.

"China will take necessary measures tosafeguard the legitimate rights and interests of Chinese companies," sheadded.

Jim Collins, CEO of Excelsior CapitalPartners in New York, said: "It's like following a tennis match. I can'tkeep up with the back and forth. Access to capital has been so globalized,though, that I think it is all about politics and would have almost zero impacton the Chinese telcos' ability to raise money from Western investors."

China Merchants Securities, a Chinesesecurities company, said in a research note that the delisting will not havesubstantial impacts on the three Chinese telecom operators. "They havesufficient capital and diversified financing channels. Their businesses arealso mainly concentrated in China, with large user bases and stableoperations."

Liu Chunsheng, an associate professor ofinternational economics and trade at the Central University of Finance andEconomics, said the delisting U-turns have undermined the US' credibility as aglobal financial hub, by sparking concerns whether Washington will imposesanctions on firms from other economies in an arbitrary and unpredicted manner.

The U-turns could backfire in that theyhave provided an opportunity of elevating the financial heft of China, whichhas, by contrast, been consistent in gradually opening up its financial sectortoward a more market-oriented, law-based position, Liu said.

That said, Liu stressed that there remainsa long way to go for China to become a major global financial center.

"It will be beneficial for both sidesif the Chinese and the US governments resolve their disputes in a number offields, including regarding US-listed Chinese firms, via a comprehensive andopen dialogue," he added.