On January 11th local time, on the New York Stock Exchange delisted the three operators of China Mobile , China Unicom and Telecom, and officially stopped stock trading.
or not to pick it, this is a big problem for the United States - otherwise it would not go back on its word twice within 5 days.
The cause of this incident was an executive order of Trump , which attempted to prohibit U.S. investors from investing in so-called "Chinese companies with military backgrounds."
htmlOn January 2, the New York Stock Exchange issued an announcement that it would delist the three major Chinese operators listed on the New York Stock Exchange. But on January 4, the New York Stock Exchange decided to cancel the delisting. On January 6, the New York Stock Exchange decided to delist again.'s "random" behavior has refreshed many companies' perceptions of the "old-branded" American capital market.
stands on the door
Whether it is taken or not, the operators' reactions are relatively calm.
htmlOn January 8, China Unicom issued a special announcement saying that the delisting incident will not have a significant impact on the company.Where does the confidence come from? Data won't lie.
is calculated according to the closing price on January 8. The ADR market value of China Mobile , China Unicom and China Telecom in US stock is equivalent to RMB 18 billion, RMB 1.2 billion and RMB 800 million respectively.
is not too much for the three major operators.
The cash held by the three major operators alone is enough to repurchase all the shares they circulated in the United States.
In the first half of 2020, China Unicom 's cash, cash equivalents and short-term investments were RMB 45.8 billion, almost 40 times the market value of the US stock market. China Mobile situation is similar.
Cash is only a small part of the total assets of the three major operators, and their circulating market value in the US stock market is not the same as the total assets.
In addition, there are many exit mechanisms. The three major operators are listed in the United States and are issued "American Depositary Receipts".
Zeng Gang, deputy director of the National Finance and Development Laboratory, said that this is actually a "mirror". A "American depositary receipt" actually corresponds to a certain number of stocks. These stocks may be China Unicom's Hong Kong stock , and there is some conversion relationship in the middle.
In other words, this is like opening a "door" between Hong Kong stocks and US stocks. The US stocks purchased by American investors are actually Hong Kong stocks. Funds flow inside and outside the "door" through some conversion relationships. It is relatively easy to exit the "American depositary receipt" into Hong Kong stocks.
Therefore, in response to sanctions, operators have relatively sufficient ammunition.
Because of this, by January 8, the stock prices of the three companies all stopped falling and stabilized in the late trading.
In contrast, the United States on the other side of the "door" is not very calm.
No matter how you deal with this matter, it seems that it cannot satisfy all parties.
First, after the New York Stock Exchange revoked its delisting, the US Treasury Department directly intervened and demanded that the delisting process be restarted. Treasury Secretary Mnuchin directly called New York Stock Exchange President Cunningham to put pressure.
Mnuchin's pressure may have to be done. After the delisting was revoked, Senator Rubio, a former Republican presidential candidate, made an exaggeration in a statement saying that the Treasury Department tried to undermine the president's executive order and blatantly attempted to serve the interests of Wall Street at the expense of the interests of the United States.
Rubio's words hold a gun and a stick, meaning it means something. Mnuchin himself has served as an executive and partner at investment banks and funds on Wall Street. The implication is that Mnuchin tends not to delist for the sake of Wall Street's interests.
Then, Mnuchin immediately put pressure on the New York Stock Exchange, which was somewhat self-evident. To put it bluntly, behind this is a "serial show" by American politicians.
Politicians are embarrassed to "show off" the New York Stock Exchange. Its order changes on the issue of delisting have been criticized by all parties. Dan David, founder of a fund, said that the New York Stock Exchange is trying to judge the political trend, and the situation is quite confusing now.
The New York Stock Exchange's behavior has caused sharp fluctuations in the US stock prices of the three major operators, which has made investors very dissatisfied.
An engineer based in Maryland said he sold China Mobile stock in loss on Monday, when it looked like the stock would be delisted. But this accidental "missing the opportunity" and he missed the stock's gain of more than 9% the next day.
The stock investor said angrily: "I am very dissatisfied with the ban and am also angry at the New York Stock Exchange's changing policy of delisting."
Although making decisions alone has caused chaos in the relevant U.S. parties, an American media also had no choice but to admit that the New York Stock Exchange's decision is unlikely to hurt these Chinese telecom giants.
They also added an angle - the proportion of the US business volume in these companies' international businesses is minimal.
In the hustle and bustle, operators stood calmly against the door, watching the noisy scene inside the door. But it was not the case when it was twenty years ago.
Behind this farce is the end of an era.
To tell the story behind "delisting", you must start with "listing".
This is not only the growth process of a company going to the United States, but also the process of a country moving from inside to outside, from one era to another.
opens the door
"brand", which is a threshold for entry for companies that need public financing.
We often say "listing" means that companies publicly issue additional shares to investors for the first time through the stock exchange.
It means that a private company has completed its transformation to a public company for the first time. After listing, the value of a company will increase to varying degrees, from ten times to hundreds of times.
Industrial Bank Chief economist Lu Zhengwei believes that for enterprises, listing is the best "advertising".
In short, "listing" is a journey to success. And the United States was once considered the end of this trip.
20 years ago, the United States was the world's financial center. Companies listed on the New York Stock Exchange and Nasdaq can not only obtain huge amounts of funds, but also have "value endorsement".
The Chinese companies back then also had the same dream. The telecommunications industry can be said to be one of the "special players".
At the end of the last century, the third wave of information technology revolution came. The telecommunications industry abroad is booming: Motorola 's mobile communications equipment, Apple's McIntosh personal computer, and Netscape's browser are well-known in the United States. Under the electronic quotation list of Nasdaq, many companies have ushered in a highlight moment.
At that time, China Unicom had just been established. Not to mention industries, one of the important tasks ahead is telecommunications infrastructure.
By 2000, China's second-generation telecommunications infrastructure was still in the stage of large-scale laying, and the penetration rate of mobile communications was low, so it was necessary to speed up the construction. In addition, market-oriented reform also requires the introduction of advanced technologies and the establishment of a modern enterprise system.
The picture shows the prospectus of China Unicom listed in Hong Kong in 2000.
all require a lot of money to achieve these goals. Listing has become one of the options to be included.
Around 2000, the total market value of A-share companies was only RMB 4809.094 billion, while the US stock market was at a historical high. This means that the US stock market can give China Unicom a relatively high valuation.
not only needs to consider how much money it raises, but also needs to consider how quickly it can get the money.
At that time, China's capital market adopted a "approval system", and companies had to queue for at least one year to go public. The US capital market adopts a "registration system", and the review time only takes about 4 to 5 months.
raises a lot of funds and is also fast. Naturally, when the conditions for listing are ripe, China Unicom will first turn its attention to the United States and Hong Kong.
At this stage, the most important thing is to sell the stock.
To go public and become a public company, we need a story that everyone loves to listen to.
This stage is also called a "roadshow". On the eve of listing, companies need to tell stories to investors everywhere and attract large institutional customers to subscribe to stocks.
On May 22, 2000, China Unicom began a two-week global promotion.
At this time, China Unicom was already the second largest telecom operator in China, and the scale of this listing financing was not only the largest in China at that time, but also the largest among Asian countries except Japan at that time. The sample has a different meaning.
Even so, not many people agree with their stories. On April 17, before the promotion, even some American funds that had participated in the Unicom project opposed China Unicom's listing in the United States.
At China Unicom's global promotion conference, many investors were questioning China Unicom's valuation.
various factors are superimposed. The subscription rate of China Unicom shares was not high a week before its upcoming listing. This also means that China Unicom's shares can only be priced at medium levels.
Despite this, in June 2000, the funds raised by China Unicom after listing on Hong Kong and US stocks still solved the urgent problem. Wang Jianzhou, who was then the director and executive vice general manager of China Unicom , said: "Unicom raised US$5.65 billion in the first financing, which is a considerable amount of construction funds for China Unicom."
With the help of this money, in 2001, China Unicom was launched on CDMA mobile network. Subsequently, China's communication infrastructure began to move onto the fast lane and mobile phones began to become popular. The story of
China Unicom is just the beginning. Seven days after China Unicom went public, NetEase was launched in the United States. In the following month, Sohu also went public in the United States. There were also queues behind China Offshore Oil, China Telecom, etc.
When the door was opened, China's pace of integration into the world became faster.
Inside and outside the door
When more and more Chinese companies begin to move from "inside the door" to "outside the door", they find that it is not only "good wine" that awaits themselves.
In 2001, the US technology stock bubble burst.
Chinese Internet companies such as Sina, NetEase and Sohu have basically fallen below the issue price. In March, the stock prices of Sina, Sohu, NetEase hovered between US$1-2, and had reached the bottom line of delisting. On July 19, NetEase received a notice from Nasdaq requesting a suspension of trading.
In the minds of some companies, delisting often means an official proof of failure, proving that the company's qualifications do not meet the requirements of the public company.
This is the life and death moment experienced by the first batch of Chinese stocks listed in the United States. The crisis of "delisting" for Chinese National Congress is getting closer and closer. Crisis like
not only comes from market laws, but some people want to directly erase the figure of listed Chinese companies.
On August 2, 2001, Senator Jesse Helms of the Republican U.S., proposed a bill to Congress to prohibit Chinese state-owned enterprises from listing on the New York Stock Exchange and the Nasdaq, and also ban bond issuance in the U.S. capital market.
This bill is called the "China Free Enterprise Law".
Helms is an old anti-China faction active in American politics. When this bill was proposed, Helms had just lost his post as chairman of the U.S. Senate Foreign Affairs Committee for 3 months, and his successor was Democratic Senator Biden .
Therefore, this bill is more like a way to gain power after Helms loses power. But his body no longer supports him to continue walking. Helms is ill for a long time and has to rely on a wheelchair when entering and leaving Congress.
20 days later, Jesse Helms officially announced that he would retire after the end of his term. The so-called "free enterprise law" people left, but the performances of Helms still caused panic.
Because Chinese companies rarely saw this kind of situation in the past.
Muddy Waters Citrus short-selling institutions such as short-selling institutions can make the wealthy billionaire embarrassed, let alone the pressure from senior executives of the US Congress.
stock price plummeted, public criticism, and politicians threatened.
entered this door that began to open, but found that it was not as warm and comfortable as imagined.
The Sarbanes-Oxley Act has increased the difficulty of Chinese companies going public in the United States. The bill has extremely high financial standards for foreign companies to list in the United States.
The picture shows the "Sarbanes-Oxley Act".
In addition, the "US-China Economic and Security Review Committee" established in 2001 is also a hidden danger for Chinese companies to go public in the United States.
In August 2005, a Chinese lawyer participated in the committee's hearing and was surprised to find that this was a different place from Wall Street, and their thinking, perception, interests and concerns were completely different from those in the business world.
"American investors are tools of Chinese government enterprises" "Beware of the 'China bubble'"... These sensational views filled the entire conference. After the meeting, the lawyer believed that many of the contents of the discussions he heard that afternoon became meaningless. It is not surprising that
says these remarks. Since 2001, the U.S.-China Economic and Security Review Committee has submitted and published a report to the U.S. Congress every year, which is full of vigilance and hostility towards China's development.
shadow is not only a deliberate suppression from the regulatory authorities, but also an organized targeted hunt by US "short selling institutions".
The chief financial officer of an Internet company that intends to list overseas told the author that since 2001, the US capital market has undergone many collective shortings against Chinese stocks listed in the United States.
This made entrepreneurs who were already listed in the United States helpless and heartbroken, and also made more and more people start to think calmly. The CEO of an Internet company lamented that it is very contradictory to go public in a Chinese website that thousands of Chinese people use to go public in a place far away from their hometown.
"Users in China have no channels to buy stocks, and American investors do not use this product. They do not understand or pay attention to Chinese companies. The progress and achievements of Chinese companies cannot affect them there."
's former craze for listing in the United States began to cool down, while at the same time, the capital market within the country is heating up. The most direct manifestation of
is that the scale of China's capital market continues to expand.
At this time, the time to further integrate with the world is gradually ripe.
In 2001, China officially joined the World Trade Organization. The following year, the financial opening policy allowed overseas institutional investors to enter my country's A-share market to invest after passing the approval. This is the first time in history.
This is a win-win choice.
On the one hand, foreign capital can directly share China's development dividends, and on the other hand, the equity participation of these top international financial institutions also objectively endorses Chinese companies to go global.
The volume of China's capital market has grown exponentially.
html After 2008, the market value of A-shares reached 50.62 trillion yuan. Compared with 4.8 trillion 16 years ago, it is more than 10 times higher.The subsequent small and medium-sized enterprise board and the GEM were launched, and thousands of companies of different sizes and ownership were listed in China.
No matter the outside, the inside is already sunny.
And listen to the wind and rain outside the door
In 2020, for many Chinese companies listed in the United States, the "storms" they face are even more violent.
In April 2020, SEC Chairman Jay Clayton used the excuse of information disclosure issues to ask investors not to buy stocks of Chinese companies listed in the United States.
The chairman of the U.S. Securities and Exchange Commission warned U.S. investors that Chinese companies have "misleading" information disclosure.
At the same time, many anti-China politicians in the United States have worked hard to convince the U.S. government to stop investing in Chinese corporate stocks with federal employees. Not to mention the "sniper" of shorting the industrial chain. In November, Muddy Waters once again sniped a Chinese Internet company listed in the United States. Earlier in 2020, Muddy Waters issued short-selling reports on Chinese stocks listed in the United States many times, but many of the allegations were later proved to be incorrect.
targeted crackdowns by short-selling institutions, suppression by regulatory authorities, uncertainty brought about by the world epidemic... This is a turbulent year.
Maybe going home is the voice of many listed companies in the United States.
On June 8 last year, the JD offering subscription scenario, which started its secondary listing, was very popular. Among them, the publicly sold part in Hong Kong received a total of about 396,000 subscribers, with a subscription multiple of up to 178.9 times.
, which was once delisted on the US stock market, had a total market value of over HK$450 billion on the day of listing on the Hong Kong stock market on June 11. The return of
is underway, and China's capital market seems to have seen the storm outside the "door", and the introduction of a series of policies is very targeted.
On April 30, 2020, the China Securities Regulatory Commission issued an announcement, lowering the threshold for red chip enterprise , which has been listed overseas, to help overseas Chinese stocks that meet the requirements return to A-shares.
For some listed companies in the United States who are in deep trouble, this is undoubtedly a timely help.
On July 16, 2020, SMIC , which has been delisted from the US stock market, was listed on the Shanghai Science and Technology Innovation Board , with a sharp rise of 246% on the opening. SMIC has become the first overseas listed red chip company on the Science and Technology Innovation Board to return to the A-share market. The market value once reached 525.1 billion yuan.
Whether it is "the body and land are the same" or "crossing the ocean", this is the choice of the market. At least for some Chinese companies, their sight has begun to turn to the local area.
However, the development of the two capital markets inside and outside the door is not a zero-sum game, one rises and the other falls, and exchanges and cooperation have always been the theme of Sino-US interaction.
A small group of American politicians tried to violate the rules and interfere with this choice, but they did not succeed. On the one hand, top foreign financial institutions, including US funds, conduct a large number of business in China.
On the other hand, there are still many Chinese companies listed in the US stock market in 2020. Last year alone, 37 Chinese companies listed on the US stock market. The total amount of funds raised reached US$12.229 billion.
In a sense, the "third type of America" is the disenchanted United States. It is not an idol or a demon. Instead, it is based on in-depth communication and a rational understanding. The temporary storm outside the door will not affect the general trend of opening up and cooperation.
is still the same old saying: win-win cooperation is the best choice for Sino-US relations.
Source: Central Committee of the Communist Youth League
