NYSE Head Warns: Delisting Chinese Firms Would Drive Business Elsewhere

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NYSE Head Warns: Delisting Chinese Firms Would Drive Business Elsewhere

We saw a mix of headlines last week that indicated the Trump administration was reviewing investment limits for China. Bloomberg first reported on Sept. 27 that Trump wanted to delist Chinese companies from US stock exchanges. Then by Sep. 29, the White House denied the story. 

The uncertainty triggered the head of the New York Stock Exchange (NYSE) on Oct. 3 to comment on the threat of delistings, reported Reuters.

NYSE Head Warns: Delisting Chinese Firms Would Drive Business Elsewhere

Stacey Cunningham, president of Intercontinental Exchange Inc-owned NYSE, warned delisting Chinese companies from US exchanges would be disastrous for Wall Street banks because it would suggest these multinationals would gravitate to other exchanges in the world.  

“It wouldn’t mean that US investors would be protected if that happened,” Cunnigham said at a Security Traders Association conference in Washington. “It just would mean other markets would be attracting more listings.”

“That would mean Alibaba and all of these other large companies couldn’t come to the US anymore, and so we’ve been lobbying to solve the problem instead of just legislating companies away,” said Cunnigham. 

But it’s just Cunningham who has spoken out against the threat of delistings.

Clete Willems, the ex-deputy director of the National Economic Council, told CNBC on Oct. 1 that cutting off the money flow between the US and China is an economic weapon in the trade war, and could backfire significantly if not correctly done. 

Willems also reiterated Cunningham’s view that these same Chinese companies would just get listed in London, Germany, Tokyo, or Hong Kong. 

Here is the market capitalization of Chinese companies listed on US exchanges. 

NYSE Head Warns: Delisting Chinese Firms Would Drive Business Elsewhere

And yes, the threat of delisting Chinese companies could be disastrous for Wall Street banks who profit from new issuances and advisory services.

 


Tyler Durden

Fri, 10/04/2019 – 13:50

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