BlackRock sells $200-million China Telecom stake after US ban

BlackRock has sold almost all its stake in China Telecom, a company subject to a new ban on United States investment, a stock market filing on Friday, January 15, showed.

The move comes as US investors scramble to exit stocks subject to the sanctions, which ban Americans from owning companies deemed to have links with China’s military.

The world’s biggest asset manager sold 818 million shares in China Telecom, one of 44 sanctioned companies, at an average of HK$1.92 each on Tuesday, January 12, a Hong Kong exchange filing showed, 12% below Tuesday’s closing price.

The filing gave no reason for the HK$1.6-billion ($206-million) sale, which reduced BlackRock’s stake in China Telecom from 6.1% to 0.2%, and BlackRock had no immediate comment.

BlackRock said on Monday, January 11, its index funds had adjusted holdings to reflect moves by MSCI Incorporated, FTSE Russell, and S&P Dow Jones Indices to cut China Telecom and other firms affected by the sanctions from their benchmarks.

The Trump administration expanded the investment ban, to an extra 9 firms on Wednesday, January 13, and investors expect more liquidations to come from big US funds before the rules take effect in November 2021.

China’s foreign ministry has said the sanctions amount to wanton oppression of Chinese companies. China Telecom shares rose 1.4% to close at $2.34 on Friday, as some non-US investors sought to pick up the stock cheaply. – Rappler.com