Home 2020 SEC’s Chinese Blacklisted Firms Removed from the S&P DJI Indexes

SEC’s Chinese Blacklisted Firms Removed from the S&P DJI Indexes

PresidentTrump #Chinese #PLA #stocks #SEC #blacklisted


“Funds that follow those indices will have to sell. This goes beyond the routine annual changes to names on the index“– Paul Ebeling

President Trump has banned US investments in companies linked to the Chinese People’s Liberation Army aka PLA.

S&P Dow Jones Indices said Thursday it will remove 10 Chinese companies from its equity indices, including Hikvision and SMIC, following a Trump Administration order prohibiting purchases by US investors of certain Chinese securities.

These securities will be deemed ineligible from equity indices prior to the market open on 21 December, S&P DJI said in a statement

It will also remove certain securities issued by additional Chinese companies in its fixed income indices prior to the open on 1 January 2021. 

For Japan, the outstanding balance of passive funds is much larger than active funds, so the impact is very significant.

Once the passive funds start selling, the active funds will be inclined to do the same. There is still some time before these changes take effect, so investors can reduce their positions gradually, but the net effect is the same.

The measures taken against SMIC (OTCPINK:SMICY) are harsh. This is action is designed to prevent them from making semiconductors

Have a healthy day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.