FTSE Russell to drop eight Chinese firms after US blacklisting

Boston/Washington: Index provider FTSE Russell will delete shares of video security firm Hikvision and 7 other Chinese companies from certain products after a US order restricting purchase of their shares, it said on Friday. FTSE Russell said it might drop shares in companies like Hangzhou Hikvision, China Railway Construction Corp, and China Spacesat.

The move shows how a recent bid by the White House to provide teeth to a blacklist of Chinese companies allegedly backed by China’s military could crimp U.S. investments within the country, often held in passive products built on broad indexes.

In a statement sent by a spokesman for owner London stock market Group,, FTSE Russell said it might drop shares in companies like Hangzhou Hikvision, China Railway Construction Corp, and China Spacesat.

FTSE Russell said it acted on feedback from index subscribers and other stakeholders, and was following its policy when sanctions are imposed that restrict investments.

In the statement issued after U.S. markets closed on Friday, FTSE Russell said the deletions from its FTSE Global Equity Index Series and a number of other others would become on Dec. 21.

A spokesman said its treatment of the businesses remains under review in other indexes, including its FTSE China and China A products, considered China domestic indexes.

Rival index provider MSCI Inc had previously said its products would “reflect any necessary changes” counting on U.S. law. A spokeswoman didn’t immediately answer questions.

FTSE Russell, which previously said it had been reviewing securities, said it could drop more companies supported the findings of U.S. officials.
All eight companies to be dropped figure on an inventory of “Communist Chinese Military Companies” compiled by the Pentagon.

They include China Communications Construction Co Ltd, China engineering & Construction Corp Ltd, CRRC Corp Ltd, Dawning Information Industry Co Ltd and China National Chemical Engineering Co Ltd.

Last month the White House published an executive order, first reported by Reuters, barring U.S. investors from buying securities of the blacklisted firms, starting in November 2021.

A Hikvision spokesman said the order’s decision to pursue it had been “groundless” because the company had never participated in research and development work for military applications.

“Hikvision has tried to completely cooperate with the U.S. government and transparently answer policymakers’ questions,” the spokesman said during a statement.

“We have tried to correct misunderstandings about the corporate and our business. we’ll still attempt to do so.”

China Railway Construction Corp said it had been unable to right away answer requests for comment. the other six companies couldn’t be reached outside business hours in China on Saturday.

China’s top chipmaker SMIC and oil giant CNOOC. were among four more companies the Pentagon added to its list of barred firms in the week .

FTSE Russell spokesman Tim Benedict said the corporate was conscious of those additions, adding, “We will evaluate those in due course.”
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.