BlackRock sells HK$1.6b China Telecom stake after US ban

[HONG KONG] BlackRock has sold almost all its stake in China Telecom, a company subject to a new ban on US investment, a stock market filing on Friday 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, a Hong Kong exchange filing showed, 12 per cent below Tuesday's closing price.

The filing gave no reason for the HK$1.6 billion (S$274.1 million) sale, which reduced BlackRock's stake in China Telecom from 6.1 per cent to 0.2 per cent, and BlackRock had no immediate comment.

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

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

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

REUTERS