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5 Dec, 2020 11:30

British index provider to drop eight Chinese corporations after US blacklisting

British index provider to drop eight Chinese corporations after US blacklisting

FTSE Russell, an arm of the London Stock Exchange, announced plans to delete shares of eight Chinese firms from certain products shortly after Washington added them to a blacklist of companies with alleged Chinese military ties.

The international index provider will remove shares of the eight enterprises from its FTSE Global Equity Index Series (GEIS), its FTSE China A Inclusion indices, and associated indices beginning on December 21 following the quarterly index review.

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The list of affected firms includes China Communications Construction Company, China Spacesat, China Nuclear Engineering & Construction Corporation, Hangzhou Hikvision, CRRC, Dawning Information (Sugon), China National Chemical Engineering Group and China Railway Construction, according to a statement by the London Stock Exchange Group.

A combined market capitalization of the blacklisted firms amounts to $143.1 billion, according to Bloomberg data, compiled at the close of trading on Friday.

“Sanctioned companies will only be considered for re-inclusion in standard FTSE Russell indexes after a period of 12 months from the date of sanctions being removed,” the group said.

The step comes days after the US administration introduced a step-by-step ban of 35 Chinese companies, and ordered restricting purchasing and selling of their shares over alleged ties to the Chinese military sector.

Also on rt.com Trump’s blacklist of Chinese firms with ‘military ties’ is a blatant attempt to keep Boeing king of the skies

According to FTSE Russell, additional constituents will be removed as soon as they are added to US sanctions lists by the Office of Foreign Assets Control, an arm of the US Treasury Department.

Earlier, rival index providers MSCI and Nasdaq announced plans to evaluate whether to drop the sanctioned firms, stressing that their products would “reflect any necessary changes” depending on US legislation.

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