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FTSE Russell to drop eight Chinese companies after Trump order

LaToya Harding
·Contributor
·2-min read
A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain August 24, 2015. World stock markets plunged on Monday, as a near 9-percent dive in China shares and a sharp drop in the dollar and major commodities sent investors rushing for the exit. The Dow Jones Industrial Average dropped more than 1,000 points as Wall Street opened, and the benchmark Standard & Poor's 500 index slid more than 2.5 percent, a drop that puts it nearly 10 percent below its record high.  REUTERS/Suzanne Plunkett
In a statement sent by a spokesman for owner London Stock Exchange Group after markets closed on Wall Street on Friday night, FTSE Russell said it would drop shares in companies such as video security firm Hikvision. Photo: Reuters/Suzanne Plunkett

Index provider FTSE Russell has said it will drop eight Chinese companies from certain products after a US order from Donald Trump restricted purchase of their shares.

In a statement sent by a spokesman for owner London Stock Exchange Group (LSE.L) after markets closed on Wall Street on Friday night, FTSE Russell said it would drop shares in firms such as video security firm Hikvision (002415.SZ), China Railway Construction (1186.HK) and China Spacesat (600118.SS).

The other firms are China Communications Construction (1800.HK), China Nuclear Engineering & Construction (601611.SS), CRRC Corp (1766.HK), Dawning Information Industry (603019.SS), and China National Chemical Engineering (601117.SS).

Last month Trump signed an executive order preventing US citizens and companies from buying shares in firms connected to the Chinese military from January.

A Hikvision spokesman said in a statement that the order’s decision to pursue it was “groundless” as the company had never participated in research and development work for military applications.

“Hikvision has tried to fully cooperate with the U.S. government and transparently answer policymakers’ questions,” the spokesman said. “We have tried to correct misunderstandings about the company and our business. We will continue to try to do so.”

READ MORE: Trump bans Americans from investing in 'Chinese military-linked' firms

FTSE Russell said the deletions from its FTSE Global Equity Index Series and several others would take effect on 21 December.

It said it acted on feedback from index subscribers and other stakeholders, and was following its policy when sanctions were imposed that restrict investments.

A spokesman added that its treatment of the companies remains under review in other indexes, including its FTSE China and China A products, considered China domestic indexes. It said it could drop more companies which are dependent on the findings of US officials.

Rival index provider MSCI had previously said its products would “reflect any necessary changes” depending on US law.

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