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Major US investors fearful over billions at risk in Chinese stocks

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
This file photo taken on May 06, 2019 (L-R) shows the flags of the Hong Kong Stock Exchange, China and Hong Kong are seen flapping in the wind. (Photo by AFP)

Major US fund managers have tens of billion of dollars at stake in some of the most popular Chinese stocks on Wall Street, exposing them to potential losses should the White House move to delist Chinese firms from US exchanges.

White House trade adviser Peter Navarro on Monday dismissed reports that the Trump administration was considering delisting Chinese companies from US stock exchanges as “fake news,” helping Chinese stocks including (JD.O) and Alibaba Group Holding (BABA.N) recover some of their declines from Friday after the reports emerged.

As Navarro’s comments reduced investor fears, the S&P/BNY Mellon China Select ADR index .BKTCN rose 1.1% after tumbling more than 3% on Friday. Still, the possibility of a future US move to boot Chinese companies out of US markets remains a topic of concern for investors.

“The proposed measures would completely undermine the international ADR/GDR etc. market and would harm the US’s role as a conduit for international capital,” Jefferies equity strategist Sean Darby wrote in a client note.

Traders work of the floor of the New York Stock Exchange (NYSE) on September 30, 2019 in New York City. (Photo by AFP)

Leading US investors across Chinese companies listed on US exchanges include Blackrock, T. Rowe Price Associates and the Vanguard Group, with over $40 billion invested, according to Refinitiv data, based on fund filings.

After Monday, Chinese markets will be closed for a week-long holiday marking the 70th anniversary of the founding of the People’s Republic of China. US-listed shares of Chinese companies will continue to trade during that time, exposing them to more potential volatility.

 (Source: Reuters)

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