MSCI to remove 5 Chinese firms from global index based on Trump order (updated)

Inspur Digital Enterprise Technology

26/01/2021 07:59

(Adds background on U.S. executive order, MSCI statement)
    Jan 25 (Reuters) - MSCI Inc  MSCI.N  said it will remove
five Chinese companies from its flagship global equity index as
of the end of Jan. 27 in the absence of an update on a Trump
administration order banning Americans from investing in certain
Chinese companies.
    The five companies - CGN Power Co  1816.HK , China National
Chem  601117.SS , China National Nuclear Power  601985.SS ,
China Shipbuilding Industry  601989.SS  and Inspur International
 0596.HK  - will be removed from the MSCI ACWI Index, relevant
non-market capitalization weighted indexes and custom indexes.
    MSCI said on Monday it will delete the securities if there
is no fresh guidance from the Office of Foreign Assets Control
(OFAC) by 12 p.m. ET on Jan. 26. OFAC is an agency within the
U.S. Treasury department, which is responsible for enforcing
sanctions.
    President Joe Biden, who took office on Wednesday, is yet to
spell out plans for Trump's executive order forcing the
divestment of the Chinese securities, but can easily revoke it. 
    Former President Trump had banned Americans from investing
in Chinese companies that the Defense Department says have ties
to the military, an assertion many of the companies deny and
which China's government has said lacks evidence.
    

 (Reporting by Kanishka Singh and Bhargav Acharya in Bengaluru;
Editing by Leslie Adler and Arun Koyyur)
 ((Kanishka.Singh@thomsonreuters.com; +91 8061822801;))