- Analysts are seeing state-controlled Chinese airlines as the next potential group to depart, possibly followed by internet giants.
- And while Chinese tech giants were always expected to bear the main brunt of the delisting from American exchanges, the likelihood of airlines joining that group has been an unexpected development.
With Chinese state-owned companies dealing in commodities, real estate, and infrastructure slated to leave U.S. bourses, the next group of firms that are speculated to be on the chopping block from America’s markets are China’s massive airlines.
The voluntary delisting of five Chinese state-owned enterprises (SOEs) including Sinopec (-0.48%) and PetroChina (-0.96%) from the New York Stock Exchange is already paving the way for further exits, the result of an accounting spat that’s a throwback to the Trump administration.
U.S. regulators have been pushing for Chinese firms listed on American exchanges to disclose financial data, which Beijing has pushed back against, on threat of delisting, citing national security concerns.
Earlier this year, strained economic conditions on both sides of the Pacific raised hopes that Chinese firms, of which there are hundreds, listed on American exchanges may prevail, with regulators in Washington and Beijing hinting that some form of compromise could be reached.
But a visit by the U.S. House of Representatives Speaker Nancy Pelosi to Taiwan, as well as another congressional delegation visit to the island that China deems a renegade province, have closed the door on any potential compromise on Chinese companies listed on America’s deep and liquid capital markets.
Analysts are seeing state-controlled Chinese airlines as the next potential group to depart, possibly followed by internet giants, even though it’s hard to see how the financial data of airlines could be an issue of national security, unless they represented ownership records that Beijing would prefer remain sealed.
China Eastern Airlines (+0.42%) raised US$227 million in its initial public offering back in 1997, while China Southern Airlines (-0.32%) garnered US$632 million the same year.
Chinese internet and e-commerce giants, such as Alibaba Group Holding (-1.96%), Baidu (-0.67%), JD.com (-0.45%), Weibo and Tencent Music Entertainment Group (+5.90%), could come into focus in the coming weeks as they hold a huge amount of potentially sensitive data on millions of Chinese individuals, public enterprises and institutions.
And while Chinese tech giants were always expected to bear the main brunt of the delisting from American exchanges, the likelihood of airlines joining that group has been an unexpected development.
