Goldman, Morgan Stanley, JPMorgan to delist some products in Hong Kong

Cornelia Mascio
Gennaio 11, 2021

Wall Street institutions in Hong Kong said they are reducing exposure to Chinese companies named in a USA ban on investments in companies Washington considers linked to China's military before the rules comes into force later today.

Morgan Stanley and JPMorgan Chase & Co. will delist 500 structured products in Hong Kong, adding to the fallout from a US ban on investments in companies linked to China's military. MSCI Inc. deleted the stocks from its global benchmark indexes on Friday, triggering a rush to sell that pushed volume in the stocks to historic highs and drove China Mobile's share price to a 14-year low.

In filings to the SEHK (Stock Exchange of Hong Kong), the three banks said they will delist warrants and CBBCs (callable bull/bear contracts) linked to the Hang Seng Index, Hang Seng China Enterprises Index and China Mobile.

The statement said that according to information published by the U.S. Office of Foreign Assets Control (OFAC), the fund was no longer appropriate for U.S. individuals or companies to invest in.

Wall Street firms in Hong Kong including Goldman Sachs and JPMorgan have set out plans to reduce exposure to Chinese telecom companies named in a USA ban on investments in companies Washington considers linked to China's military.

They also said the order would take effect for the structured products from 0930 EST (1430 GMT) on Monday, when Wall Street opens.

The investment banks' filings cited a piece of OFAC guidance saying the three telecom companies were specifically included in the initial executive order.

Hong Kong's exchange said it's working closely with banks to ensure orderly delistings.

A total of 500 structured products will be affected.

The planned delisting of these products won't hurt the market and there will be sufficient investment choices to meet demand, Hong Kong Exchanges and Clearing said in a statement Sunday.

Hang Seng Indexes Co Ltd, Hong Kong's main index provider, did not immediately respond to a request for comment.

The New York Stock Exchange - after some flip-flopping - last week said it would delist the three firms' US-traded American Depositary Receipts today.

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