S&P DJI REMOVES CHINESE FIRMS FROM INDICES AFTER US ORDER

S&P Dow Jones Indices on Thursday became the second major index provider to remove some Chinese companies from its index products following a Trump administration executive order, in the latest market disruption from persistent Sino-US tensions, Andrew Galbraith reported for Reuters.

Outgoing US President Donald Trump’s executive order, unveiled in November, is designed to deter US investment firms, pension funds and others from buying shares of Chinese companies designated by the US Defense Department as backed by the Chinese military.

S&P DJI said it would remove mainland-listed A-shares, Hong Kong-listed H-shares and American Depositary Receipts (ADRs) of 10 companies including Hangzhou Hikvision Digital Technology Co Ltd and Semiconductor Manufacturing International Corp (SMIC) from all equity indexes prior to the market open on Dec. 21.

The company said it will also remove securities issued by 18 Chinese companies from its fixed income indices before Jan. 1. “The order ... may impact the ability of market participants to replicate S&P DJI Equity and Fixed Income Indices containing securities affected by the order,” S&P DJI said in a statement. A spokeswoman for Hikvision called the order’s decision to pursue the firm “groundless” and added: “We strongly protested when Hikvision was included on this list in June because, as we have shown time and again, Hikvision is not a ‘Chinese military company,’” she said.