SINGAPORE — Fears of Chinese companies being kicked off U.S. stock exchanges will ultimately benefit China, according to consulting firm Bain & Company.
That’s because those firms would look to list in Hong Kong in order to gain access to international investors, and attract funds into the market, suggested John Fildes, expert partner at Bain & Company.
The New York Stock Exchange (NYSE) is set to delist three Chinese telecommunication giants, after making two U-turns on that decision. On Thursday, it finally said it would remove U.S.-traded shares of China Telecom, China Mobile and China Unicom, citing an executive order signed by President Donald Trump
“If it does happen, then undoubtedly, it will benefit the Hong Kong listings of these companies,” Fildes said, adding that there would be an “initial price drop” because of nervousness over whether U.S. investors will come back to the stocks.
Hong Kong-listed shares of the three Chinese telecom firms plunged between 7% and 11% on Thursday after the NYSE announcement.
banning U.S. investments in Chinese firms with alleged ties to China’s military.