S&P Dow Jones Removes 21 Chinese Companies from Stock and Bond Indexes

New York Wall Street (Photo by AP Yonhap News)

[Asia Economy Reporter Kum Boryeong] Standard & Poor's Dow Jones Indices (S&P DJI) has decided to exclude 21 Chinese companies from various stock and bond index components.

According to major foreign media on the 10th, S&P DJI plans to remove the stocks (A-shares and H-shares) and American Depositary Receipts (ADRs) of 10 Chinese companies, including SMIC, China's largest semiconductor foundry, and Hikvision, a surveillance camera company, from all stock indices before the market opens on the 21st.

Additionally, before the market opens in January next year, securities of the remaining 11 companies will be excluded from bond indices.

Earlier, another index provider, FTSE Russell, announced on the 4th that it would exclude eight Chinese companies, including Hikvision, China Railway Construction Corporation (CRCC), and China Satellite, from the FTSE Global Equity Index in accordance with U.S. President Donald Trump's executive order.

President Trump signed an executive order on the 12th of last month to prohibit U.S. investments in Chinese companies owned or controlled by the Chinese military. This is to restrict stock transactions by U.S. investors and pension funds in 31 Chinese companies designated by the U.S. Department of Defense.

The U.S. Department of Defense classified four Chinese companies?SMIC, China National Offshore Oil Corporation (CNOOC), China International Electronic Commerce Center Group (CIECC), and China Construction Technology (CCT)?as companies owned or controlled by the Chinese military.

S&P DJI is a joint venture established in 2012 by S&P Global, CME Group (Chicago Mercantile Exchange), and News Corp. It calculates various benchmark indices such as the S&P 500 Index and the Dow Jones Industrial Average (DJIA).