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.”
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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