The S&P Dow Jones Indices and FTSE Russell announced they will boot out more Chinese companies from their indices in accordance with an executive order by United States President Joe Biden that prohibits investment in companies with alleged links to China's military.
Some 25 Chinese companies have been identified by the U.S. index publisher that would be removed from its index starting August 2, while FTSE Russell said it will delete 20 companies on July 28.
Included in the S&P Dow Jones Indices' delisting are China Shipbuilding Industry Co, Aerospace Communications Holdings, and Inner Mongolia First Machinery, the South China Morning Post and Reuters said.
The S&P DJI had previously removed Chinese companies like Advanced Micro-Fabrication Equipment, China National Chemical Engineering, and China State Construction International Holdings following the first executive order in November.
The move, based on an executive order signed by Biden on June 3, could deepen trouble for U.S.-listed Chinese companies already dealing with China's clampdown on its technology sector and impose tighter data security policies, The Standard said.
China has in the past week cracked down on several companies looking to list in the U.S. with cybersecurity investigations.
Ride-hailing company Didi Global became a prominent target, just days after its S$4.4 billion initital public offering on the New York Stock Exchange.
"What you saw with Didi Global this week spooked investors...we don't know what the regulatory proposals are going to look like," Thomas Hayes, chairman of Great Hill Capital LLC in New York, said.
Biden's action showed the U.S.' intent to continue to pressure Wall Street away from investments that could help China boost its military and technology capacity.
The S&P Dow Jones Indices said seven companies, including Luokung and the supercomputer maker Sugon, are now eligible to be returned to the U.S. benchmarks since they have been taken out of the list.
