Major US investors have billions at risk in Chinese stocks

Published October 1, 2019
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 12, 2019. — Reuters
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 12, 2019. — Reuters

Major United States fund managers have tens of billion of dollars at stake in some of the most popular Chinese stocks on Wall Street, exposing them to potential losses should the White House move to delist Chinese firms from US exchanges.

White House trade adviser Peter Navarro on Monday dismissed reports that the Trump administration was considering delisting Chinese companies from US stock exchanges as "fake news", helping Chinese stocks including JD.com and Alibaba Group Holding recover some of their declines from Friday after the reports emerged.

As Navarro's comments reduced investor fears, the S&P/BNY Mellon China Select ADR index rose 1.1 per cent after tumbling more than 3pc on Friday. Still, the possibility of a future US move to boot Chinese companies out of U.S. markets remains a topic of concern for investors.

"The proposed measures would completely undermine the international ADR/GDR etc. market and would harm the US' role as a conduit for international capital," Jefferies equity strategist Sean Darby wrote in a client note.

Leading US investors across Chinese companies listed on US exchanges include Blackrock, T. Rowe Price Associates and the Vanguard Group, with over $40 billion invested, according to Refinitiv data, based on fund filings.

After Monday, Chinese markets will be closed for a week-long holiday marking the 70th anniversary of the founding of the People's Republic of China. US-listed shares of Chinese companies will continue to trade during that time, exposing them to more potential volatility.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Punishing evaders
02 May, 2024

Punishing evaders

THE FBR’s decision to block mobile phone connections of more than half a million individuals who did not file...
Engaging Riyadh
Updated 02 May, 2024

Engaging Riyadh

It must be stressed that to pull in maximum foreign investment, a climate of domestic political stability is crucial.
Freedom to question
02 May, 2024

Freedom to question

WITH frequently suspended freedoms, increasing violence and few to speak out for the oppressed, it is unlikely that...
Wheat protests
Updated 01 May, 2024

Wheat protests

The government should withdraw from the wheat trade gradually, replacing the existing market support mechanism with an effective new one over the next several years.
Polio drive
01 May, 2024

Polio drive

THE year’s fourth polio drive has kicked off across Pakistan, with the aim to immunise more than 24m children ...
Workers’ struggle
Updated 01 May, 2024

Workers’ struggle

Yet the struggle to secure a living wage — and decent working conditions — for the toiling masses must continue.