ZTE shares will not be included into MSCI index

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ZTE shares will not be included into MSCI index

May 31, 2018 - 11:15
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As Bloomberg informs, ZTE Corp., Chinese maker of telecommunication equipment, being in the center of US-China trade dispute, will be excluded from the list of shares that will be part of MSCI Inc’s index soon.

Photo © Gerd Altman, CC0 1.0

As Bloomberg informs, ZTE Corp., Chinese maker of telecommunication equipment, being in the center of US-China trade dispute, will be excluded from the list of shares that will be part of MSCI Inc’s index soon.

In total five Chinese companies were excluded from the list, since trading of their shares was suspended. ZTE stopped trading on April 17 after it was banned from dealing with US suppliers. ZTE’s equities in Hong Kong, also suspended since last month, are already in MSCI’s gauges.

On Friday MSCI will include more than 200 Chinese companies in its indexes.

Other companies excluded from the list together with ZTE, include China Railway Group Ltd., Beijing Orient Landscape & Environment Co., China Hainan Rubber Industry Group Co. and Shanxi Taigang Stainless Steel Co.

Trading suspension happens in China more often than at other exchanges. Value of frozen shares at country’s exchange exceeded $456 billion in March. It is 150 times higher than in the US. Frequency of such halts was one of reasons why MSCI did not include Chinese stocks in its indexes before. Next check by index compiler will be on August 13.

Last week President Trump announced that ZTE can return to dealing with American companies, if it pays $1,3 billion fine, changes management and provides security guarantees.

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