January 07, 2021 | Editor: Martin Wennerström
Following confusion, NYSE delists three Chinese companies
The New York Stock Exchange (“NYSE”) has announced the January 11 delisting of the American depositary receipts (“ADRs”) of three Chinese telecommunications companies. The concerned companies are China Mobile, China Telecom, and China Unicom Hong Kong, all controlled by the Chinese state and also listed on the Hong Kong Stock Exchange. The announcement is the exchange’s second reversal on this matter in about a week, and was reportedly prompted by the issuance of “new specific guidance” by the U.S. Department of the Treasury.
The delisting is ultimately rooted in a Nov. 12 executive order from the Trump administration prohibiting transactions involving publicly traded securities of companies linked to the Chinese military. However, this executive order did not specifically address whether an outright delisting of such companies would be required, hence the NYSE’s apparent indecisiveness. Meanwhile, in December 2020, the U.S. Congress passed a bill requiring all foreign US-listed companies to comply with the US Securities and Exchange Commission (“SEC”) accounting policies and prohibiting listings of companies that do not allow the review of their financial audits.
Alibaba shares slide as regulatory pressure mounts
Shares of e-commerce giant Alibaba Group Holding Ltd. (“Alibaba”) have fallen around 9% after Chinese regulators opened an antitrust investigation into the company’s operations at the end of last month. Chinese regulators accuse Alibaba of forcing merchants to exclusively sell their products on the company’s platform. The announcement comes after regulators suspended the IPO in Shanghai and Hong Kong of Alibaba’s payments arm Ant Group over regulatory and disclosure concerns. Amid regulatory concerns, Alibaba also announced that it will increase its share repurchase authority from USD 6 billion to USD 10 billion, effective over a two-year period.
Fiat and Peugeot merger gets shareholder approval
On January 4, shareholders of automakers Fiat Chrysler Automobiles (“Fiat”) and Peugeot’s parent PSA Peugeot-Citroen approved with more than 99% of votes in favor of the USD 52 billion merger of the two companies. The combined entity, which will be called Stellantis and would be the world’s fourth largest in vehicle sales, is expected to bring around USD 165 billion in revenues. The shares of the new company will be listed in Paris, Milan, and New York. PSA CEO Carlos Tavares will retain the CEO role in Stellantis, while Fiat Chairman John Elkann will hold the chairmanship. The merger is pending certain regulatory approvals.
Following Brexit, EasyJet and Ryanair suspend voting rights
Low-cost carriers easyJet Plc and Ryanair Holdings Plc (“Ryanair”) announced that they will restrict the voting rights of non-EU shareholders in order to comply with the European Union (“EU”) ownership rules. European airlines must be majority owned and controlled by EU nationals to have carrier rights within the region. Following Brexit, UK shareholders are no longer able to buy shares in Ryanair or vote, while easyJet will suspend non-EU voting rights on a on a “last in, first out” basis to assure a non-EU ownership below 49.5%. easyJet has warned of forced sales of shares to EU nationals if its EU ownership remains below this threshold.