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China’s SMIC removal from FTSE Russell indices confirmed

(ATF) FTSE Russell confirmed on Monday January 4 that it will remove another three Chinese companies from its global equity indices, including China’s leading chipmaker Semiconductor Manufacturing International Corporation (SMIC).

China United Network Communications, Nanjing Panda Electronics and SMIC will be deleted from FTSE Russell’s FTSE Global Equity index series, as well as the FTSE Global China A inclusion indices from Thursday.

FTSE Russell said on Monday it will also remove SMIC from its FTSE China 50 Index and video security firm Hangzhou Hikvision Digital Technology from its FTSE China A50 index, after deleting it from the FTSE Global Equity index last month.

The Trump administration issued an executive order in November prohibiting US investments in Chinese companies it said are owned or controlled by the Chinese military. Dozens more were then added to the blacklist in December.

Other global index providers including MSCI, Nasdaq, the New York Stock Exchange (NYSE) and S&P Dow Jones Indices have also removed Chinese firms from their benchmarks.

Shares in China’s three biggest telecoms firms China Mobile, China Telecom Corp and China Unicom Hong Kong fell as much as 5% in Hong Kong on Monday, the first trading session since the NYSE said it would delist their stocks.

But China Mobile shares recovered to close down 0.79% at HK$43.85, while China Telecom closed 2.79% lower and China Unicom ended up 0.45%, versus a 0.89% rise in the benchmark Hang Seng Index.

SMIC had a fall of roughly 2.5% for its Hong Kong-listed shares but could see further pressure during the Asian trading session on Tuesday after a drop of around 1.5% for key US stock indices on Monday, and to reflect any impact from the FTSE Russell index exclusion confirmation.


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Jon Macaskill

Jon Macaskill has over 25 years experience covering financial markets from New York and London. He won the State Street press award for 'Best Editorial Comment' in 2016

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