Investors who own ADSs in China Mobile, China Telecom or China Unicom have two options. They can sell their shares. (American investors must divest any holdings in similarly designated Chinese companies by November 11.) Or, they can exchange their American shares for H shares of the companies traded in Hong Kong, as the ADSs are fungible.
Full Answer
Can US investors invest in China Mobile now?
Apr 21, 2022 · - China Mobile can decide to do a buyback at fire sale price and reduce their dividend outlay. - The dividend flowing from China to the US shareholders and consequently into the US economy will...
Is China Mobile the perfect stock for growth?
Jan 04, 2021 · The Bank of New York Mellon ( BK) is the depository for China Mobile ADRs, and investors have the option of delivering their holdings to the bank in exchange for common …
Who is the depositary for China Mobile shares?
Jan 04, 2021 · Investors who own ADSs in China Mobile, China Telecom or China Unicom have two options. They can sell their shares. (American investors must divest any holdings in …
Does China Mobile trade on the NYSE?
Mar 16, 2021 · China Mobile Ltd. is considering an A-share listing after the country’s largest wireless carrier was removed from the New York Stock Exchange under a Donald Trump-era …
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Jan 05, 2021 · Key Points. Rising tensions between the U.S. and China are increasing the chance that Chinese stocks listed in New York might be forced off exchanges there. Removal of a …
How do I sell a delisted stock?
What happens to China Mobile stock?
What happens to your money if a stock is delisted?
What happens if Chinese stock is delisted?
Will China stocks be delisted?
The company filed its 2021 Annual Report with the SEC on March 10 and less than two weeks later the company became the sixth Chinese stock identified to be potentially delisted from U.S. exchanges on March 23 this year.Mar 28, 2022
Is China Mobile delisted?
Do you lose all your money if a stock gets delisted?
Can a delisted stock be relisted?
What are the benefits of delisting?
Is SNDL getting delisted?
The Nasdaq gave Sundial this notice last August.Feb 9, 2022
China's largest telecom stocks have become toxic investments
Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Follow him on Twitter for more updates!
1. It's too risky to hold state-backed Chinese companies
It's unclear if China Mobile, China Telecom, and China Unicom actually have connections to the Chinese military, but they are all certainly state-backed enterprises.
2. The order won't hurt the three telecom companies
The shares of China Mobile, China Telecom, and China Unicom that trade on the NYSE are merely fragments of their subsidiaries.
3. Retreating to OTC and overseas markets isn't an option
Some investors likely assume the delisted stocks would simply be moved to an OTC ( over-the-counter) exchange, where they could continue trading, or they could trade their ADRs for Hong Kong-listed shares.
4. Don't count on President-elect Biden to undo the order
If you believe President-elect Biden will undo the executive order after he takes office on Jan. 20, the three telecom stocks might look like tempting investments with their low P/E ratios and high dividend yields.
Should investors sell their Chinese telecom stocks now?
I personally own shares of China Mobile, and I previously promoted it as a stable dividend stock with a low valuation. However, the rapidly shifting situation indicates it's time to close this position and stick with safer domestic dividend stocks instead.
Summary
As I predicted back in May, the U.S. has started a crackdown on Chinese companies listed on American markets.
When will the company be delisted?
An announcement published on the China Mobile website confirms the decision taken by the NYSE to prohibit the trading of any publicly traded security giving exposure to China Mobile beginning from 9.30 am EST on January 11.
Don't keep hopes for OTC trading
When a company is delisted under normal circumstances (think about filing for bankruptcy for example), the company will move its shares to the over-the-counter (OTC) market. This usually results in low-volume trading but shareholders don't complain as long as a market would be available to actively buy and sell shares of companies they own.
What about converting the ADRs to Hong Kong-listed shares?
The Bank of New York Mellon ( BK) is the depository for China Mobile ADRs, and investors have the option of delivering their holdings to the bank in exchange for common shares of China Mobile. The exchange ratio will be 1:5, meaning you will receive 5 China Mobile common shares for each ADR that you own and wish to cancel.
The good and the bad of converting the ADRs to common shares
When the going gets tough, I always look at the bright side to cheer myself up. I'm not talking about just investing in the market, but life in general. Often, this helps me prepare well for the worst. Staying true to this principle, let me start with the positives of converting your ADRs to common stock.
Even if you are bullish, it makes sense to exit and wait for the (imminent) pullback
The decision to delist China Mobile and the other telcos have certainly hit the pride of Chinese officials, which is evident from their pledge to retaliate. From a market perspective, however, it would be American investors taking the hit.
The perks of being an international investor
I am not an American citizen, nor a resident. Through my broker, I have access to Hong Kong markets, and I will be keeping a close eye on China Mobile as I believe the stock is trading in a deeply undervalued territory as a result of the regulatory headwinds that persisted for the last couple of years.
Is China Mobile a US company?
China Mobile, which has been listed in the US for more than two decades, has the largest portion of its shareholder base in the US: about 2 per cent of its overall issued share capital as of December 31.
When does Biden take office?
Joe Biden. takes office on January 20. The Biden administration’s foreign policy is expected to be more predictable than President Trump’s, but both Democrats and Republicans remain wary of China.
What is China Mobile?
Follow him on Twitter for more updates! China Mobile ( NYSE:CHL), the largest wireless carrier in China , serves over 930 million mobile customers and nearly 170 million wireline customers.
How many customers does China Mobile have?
China Mobile ( NYSE:CHL), the largest wireless carrier in China, serves over 930 million mobile customers and nearly 170 million wireline customers. That massive customer base, along with the government's backing and a 4% dividend, made it a fairly conservative play on China's growth.
What is the Trump administration's war against Huawei?
The Trump Administration's war against Huawei and its restrictions on sales of U.S. tech products to Chinese companies sparked concerns about China Mobile's supply chain. Some of those concerns were justified, since Huawei and ZTE, which was targeted by U.S. regulators last year, are major telecom equipment suppliers for China Mobile's 5G networks.
What happens if a company is removed from the stock market?
If it's removed from the U.S. exchanges, there's little doubt that the market for shares drops considerably and the value probably falls significantly. These companies would probably just list their shares on a different exchanges, but a much smaller pool of buyers and sellers affects the potential value.
What is the holding foreign companies accountable act?
With the passage of the Holding Foreign Companies Accountable Act in the Senate, Congress takes perhaps it's most decisive step yet in removing non-compliant Chinese companies from the U.S. exchanges. The bill is aimed at bringing Chinese companies listed on U.S. exchanges into compliance with Public Company Accounting Oversight Board policies. ...
