MSCI, FTSE Russell to remove 3 Chinese telco giants from indexes

MSCI Inc. and FTSE Russell will remove three Chinese telecom giants from their indexes in compliance with a U.S. executive order.

In a Jan. 7 announcement, MSCI said it will delete the securities of China Telecom Corp. Ltd., China Mobile Ltd. and China Unicom (Hong Kong) Ltd. from the MSCI China All Shares Indexes, MSCI ACWI Indexes and relevant nonmarket capitalization weighted indexes and custom indexes by the end of trading Jan. 8. The move reflects a U.S. executive order banning investments in any entity believed to have ties to the Chinese military.

FTSE Russell said the same day that it will remove the three companies from the FTSE Global Equity Index Series, FTSE Global China A Inclusion Indexes and associated indexes. China Telecom and China Mobile will likewise be removed from the FTSE China 50 Index. The latest FTSE guidance is effective before the start of trading Jan. 11.

Shares of China Mobile and China Unicom were down 3.70% and 4.72%, respectively, around 10 a.m. in Hong Kong, while those of China Telecom fell 6.4%.

MSCI and FTSE Russell have already removed other Chinese companies from some of its indexes, citing the same executive order.

The latest move mirrors decisions by S&P Dow Jones Indices LLC and Intercontinental Exchange Inc.-owned New York Stock Exchange to stick with their original plan and remove the three telco giants in compliance with the U.S. order.

S&P Dow Jones Indices and S&P Global Market Intelligence are owned by S&P Global Inc.