FTSE Russell drops eight Chinese companies after Trump order
Index provider FTSE Russell has said it will remove eight Chinese companies from some of its indices after President Trump banned US investors from holding stakes in the businesses.
FTSE Russell said the companies, which include China Railway Construction and video security firm Hikvision, would be removed from its FTSE global equity indices and the FTSE China A Inclusion index on 21 December.
It shows how the White House’s bid to blacklist some Chinese companies could have a significant effect on US investments in the country.
Last month President Trump signed an executive order preventing US citizens and companies from buying shares in firms connected to the Chinese military from January.
In another sign of a hardening stance against China, Congress this week passed legislation to require Chinese companies listed on American exchanges to comply with US accounting standards.
Other companies like China Mobile did not appear in the FTSE Russell’s list.
All eight companies that are set to be dropped feature on a list of “Communist Chinese Military Companies” compiled by the Pentagon. They include China Communications Construction, Dawning Information Industry and China National Chemical Engineering.
The index provider, which is wholly owned by the London Stock Exchange, said the removals had come after a consultation with subscribers but that it had not yet decided the effect the sanctions will have on its fixed income indices.