Goldman, Morgan Stanley, JPMorgan to delist some products in Hong Kong

Goldman Sachs and JPMorgan plan to delist some Hong Kong-listed structured products. PHOTOS: REUTERS

HONG KONG (BLOOMBERG,REUTERS)- Goldman Sachs Group, Morgan Stanley and JPMorgan Chase & Co will delist some Hong Kong-listed structured products as a result of US sanctions, according to filings from the Hong Kong stock exchange.

A total of 500 structured products will be affected.

The products are linked to telecom companies China Mobile , China Telecom and China Unicom and local indexes including the benchmark Hang Seng Index , the three investment banks said in filings to the Stock Exchange of Hong Kong on Sunday evening (Jan 10).

The delistings follow statements last week by the US Office of Foreign Assets Control (OFAC) clarifying a November order from President Donald Trump that banned Americans from investing in Chinese companies that the US considers to have links with China's military, the filings said. The OFAC guidance cited in some of the filings said the three telecom companies were specifically included in the initial executive order.

The planned delisting of these products won't hurt the market and there will be sufficient investment choices to meet demand, Hong Kong Exchanges and Clearing said in a statement Sunday.

"HKEX is working closely with the relevant issuers to ensure orderly delisting, and facilitate buyback arrangements being arranged by the issuers," the exchange said, adding that it has the world's largest market with more than 12,000 listed products. "We do not believe this will have a material adverse impact on Hong Kong's structured products market."

The exchange said it remains competitive, citing its pipeline for initial stock offerings, and that it will continue to monitor these developments.

Hong Kong's markets watchdog, the Securities and Futures Commission, said it had stressed to the investment banks that "any action taken by them should be necessary, fair, and having regard to the best interest of investors and integrity of the market, and that investors should also be properly informed as appropriate."

Index providers MSCI Inc, FTSE Russell and S&P Dow Jones Indices said last week they would cut the three Chinese telecom companies from benchmarks wiping a combined $5.6 billion off the value of their Hong Kong-traded shares on Friday.

The New York Stock Exchange - after some flip-flopping - last week said it would delist the three firms' US-traded American Depositary Receipts on Monday.

China's foreign ministry has previously said it firmly opposes what it called US abuse of its power to oppress Chinese companies.

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