MSCI is third index giant to cull Chinese stocks banned by US

Bloomberg

MSCI Inc. became the third index provider to delete some Chinese stocks from its benchmarks, after the Trump administration banned US investments in companies with links to the Chinese military.
The firms include China Railway Construction Corp, China Spacesat, China Communications Construction, CRRC Corp., Hangzhou Hikvision Digital Technology Co., Dawning Information Industry Co. and Semiconductor Manufacturing International Corp, according to a statement. The deletions will take effect at the January 5 close. MSCI will publish its final list at the end of December to reflect any changes to Chinese firms sanctioned by the US.
MSCI’s decision follows similar moves by FTSE Russell and S&P Dow Jones this month. While firms have minimal weightings on benchmarks, the rapid removals show how effective such orders are in reducing Chinese firms’ access to global capital.
Trump’s executive order from November 12 bars American investments in Chinese firms owned or controlled by the military amid tensions between the two nations and an escalating trade war. China National Offshore Oil Corp., which will remain on MSCI’s gauges for now, was blacklisted by the Pentagon in early December.
There was little reaction in affected stocks, with traders saying an announcement from MSCI on deletions was expected. Shares of SMIC fall 9.8% in Shanghai after the chipmaker said it’s looking into reports about surprise resignation of a top executive.