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More Chinese state-owned companies expected to delist from US stock exchanges as accounting spat continues
- The voluntary delisting of five SOEs including Sinopec and PetroChina from the New York Stock Exchange could pave the way for further exits
- Analysts believe Beijing has begun a process of deciding which companies should be allowed to remain listed in the US
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More state-owned enterprises (SOEs) are expected to delist from the US capital markets, deepening an exodus arising from a regulatory impasse between Beijing and Washington.
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The voluntary delisting of five SOEs – the oil giants Sinopec, its entity Sinopec Shanghai Petrochemical and PetroChina, China Life Insurance and Aluminum Corporation of China – from the New York Stock Exchange could pave the way for further exits, according to analysts.
Their decision to apply for delisting at the same time reflects Beijing’s “preference” that companies facing higher scrutiny over accounting practices remove themselves from American exchanges, said Kenny Ng Lai-yin, a strategist at Everbright Securities International.
More SOEs are likely to follow suit, particularly those with a dual listing in Hong Kong or mainland China, whose American depositary receipts (ADR) only form a small part of their total shares capital.
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“For such companies, the actual impact of delisting is much smaller,” he said.
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