MSCI cuts China telcos from indexes after Trump ban; shares fall

MSCI Inc. will remove China’s three major telecommunications companies from its benchmark indexes, adding fresh selling pressure to stocks that have swung wildly this week on confusion over whether they should be included in a US ban on investments in Chinese companies with military ties.

The index provider’s decision to cut China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd. at the close of business on Friday will apply to the companies’ Hong Kong-listed shares. That means it could have a substantially larger impact on investment flows than the New York Stock Exchange’s closely watched decision on Wednesday — after two about-faces — to delist the companies’ thinly traded US shares.

Shares of China Unicom dropped 11 per cent in premarket Hong Kong trading, while China Mobile and China Telecom fell about 10 per cent.