BlackRock drops China Telecom

15 January 2021 | Melanie Mingas

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BlackRock has filed documents that confirm it is selling part of its stake in China Telecom for US$200 million.

News of the sale broke ahead of a new investment ban from the US, which has prohibited Americans from owning companies accused of having links with China’s military and ruling party. As many as 44 companies have been sanctioned to date.

A stock market filing from today confirmed BlackRock sold 818 million shares in the Asian telco on Tuesday for an average of HK$1.92 each, 12% below Tuesday’s closing price.

As far back as June, the US looked at blocking the Hong Kong section of PLCN on security grounds then in October, US regulator the FCC issued new rules over the licensing of foreign telecoms operators, including submarine cable companies that touch US soil.

Trump banned investments in "military linked" Chinese firms the following month with an order to block US citizens from investing in Chinese companies that officials believe to be linked to the Chinese military, the People’s Liberation Army (PLA), declaring the threat a national emergency.

 Earlier this month NYSE announced – and then unannounced – its decision to delist China Mobile, China Telecom and China Unicom shares, and index providers MSCI Inc, FTSE Russell and S&P Dow Jones followed suit.

The cuts initially wiped $5.6 billion from the share prices of China Mobile, China Telecom and China Unicom. Yesterday, the US added Xiaomi to its investment blacklist.

According to MarketScreener, China Telecom's other shareholders include: Templeton Global Advisors Ltd; The Vanguard Group, Inc.; Thornburg Investment Management; and Norges Bank Investment Management, JP Morgan Chase & Co and Citigroup among others.