As per an order from the United States, restrictions are now imposed on the buying of four shares of Chinese manufacturing and construction firms. On Thursday, the S&P Index and the Dow Jones Industrial Average became the first Indices to state that they will remove the blacklisted shares from their indices, and on Friday, NASDAQ stated that it will eliminate the shares of these four companies from its indices.
On 21st December 2020, NASDAQ will remove the shares of the following four companies from the NASDAQ Index:
- China Communications Construction Company Limited (CCCGY)
52 Week Range: $9.65 – $17.08
Average Volume: 315
Market Capital: $15.489B
Forward Dividend & Yield: 0.66 (6.81%)
- Semiconductor Manufacturing International Corporation (SMICY)
52 Week Range: $6.97 – $27.54
Average Volume: 67,126
Market Capital: $21.903B
Forward Dividend & Yield: N/A (N/A)
- China Railway Construction Corporation Limited (CWYCF)
52 Week Range: $0.0002 – $1.1600
Average Volume: 313
Market Capital: $15.719B
Forward Dividend & Yield: 0.03 (4.56%)
- CRRC Corporation Limited (CRRC)
52 Week Range: $2.860 – $6.100
Average Volume: 20,367,785
Market Capital: $169.089B
Forward Dividend & Yield: 0.16 (5.72%)
The Investors have been banned from buying any securities from the companies that are blacklisted owing to the fact that last month (21st November 2020) a White House executive order stated the same. As per President Donald Trump’s administration, these firms have a link with the military of China.
From the side of China, the response to this news was not positive and the Foreign Ministry Spokeswoman Hua Chunying criticized this move on 4th December stating that the United States must not abuse the national security and power to restrain the foreign firms.
NASDAQ has removed only those companies from all the ones that are stated in the list of blacklisted firms issued by the White House which are there on the NASDAQ Indices. Since the uncontrollable spread of Covid-19, President Donald Trump has despised China. This step of banning some of the Chinese firms is a part of the same.
The Dow Jones Industrial Average and S&P 500 Index have listed the names of the shares they would remove on 21st December 13, 2020. The shares of the companies included in their list include the Hong Kong-listed H-shares, mainland-listed A-shares, and American Depositary Receipts (ADRs) which are of 10 companies and include the Hangzhou Hikvision Digital Technology Co Limited and Semiconductor Manufacturing International Corporation Limited. The four companies of NASDAQ and these companies of S&P and Dow Jones would be eliminated from their respective indices on the 21st of December (before the market opens). The Semiconductor Manufacturing International Corporation Limited is listed on both NASDAQ Index and the Dow Jones and S&P Index as well.
The reaction of the major firms out of these upon this decision is yet to arrive but since the administration states that these firms have ties with the military of China, they had to be restricted and blacklisted.