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NYSE U-Turns on China Telecom Delisting Threat, Shares Surge

China Mobile and China Unicom shares surged higher Tuesday after the New York Stock Exchange scrapped plans to delist three China-based telecoms companies with alleged ties to the military.

The New York Stock Exchange has retreated from plans to de-list three China-based telecom companies, sending share surging in early Tuesday trading.

China Mobile Ltd.  (CHL) - Get China Mobile Ltd. Report, China Telecom Corp  (CHA) - Get China Telecom Corp. Ltd. Report and China Unicom (Hong Kong)  (CHU) - Get China Unicom (Hong Kong) Ltd. Report had been slated for removal from the Big Board by January 11 following an Executive Order from President Donald Trump in November that banned investments by U.S. citizens into 35 companies with alleged ties to the Chinese military. 

However, in a brief statement late Monday, the NYSE said that "in light of further consultation with relevant regulatory authorities" the three stocks will remain listed, sending shares sharply higher in Hong Kong, where the bulk of them are traded, as well as in pre-market trading here in the United States.

China Mobile shares were marked 9.1% higher in early trading to change hands at $29.34 each, while China Unicom shares surged 13.9% to $6.27 each. China Telecom shares were marked 9.5% higher at $28.60 each.

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The NYSE U-turn underscores, to some degree, the regulatory risks imbedded in China-based stocks amid a crackdown on anti-competitive practices in the tech sector -- including Jack Ma's Alibaba  (BABA) - Get Alibaba Group Holding Ltd. Report -- by authorities in Beijing and the impact of years of trade and security tensions between the Trump administration and the government of President Xi Jinping. 

However, with President Elect Joe Biden likely to take a less confrontational approach to trade relations with China, possibly even removing some tariffs on goods that have been in place since 2017, the NYSE's interpretation of Trump's Executive Order could suggest an expected thawing of tensions in the months ahead.