Analysis: Stay, swap or shed: Investors brace for delisting of U.S.-listed China stocks

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As a long-running Sino-U.S. diplomatic spat threatens to force Chinese companies off American stock exchanges, global equity investors are assessing ways to retain or add exposure to the world's second-biggest economy.

"U.S-listed companies coming home is the big trend," said Lawrence Lau, EY Greater China Financial Accounting Advisory Services leader. "If one day, their shares cannot change hands in the U.S., Hong Kong can serve as a safety net platform where their shares can still trade normally."Aaron Costello, Beijing-based regional head for Asia at investment consulting firm Cambridge Associates, notes that 12 of the 15 largest U.S.

Many companies have done so, so those that have not "better have a very good explanation why they're not dual-listed yet. And how they plan to solve it." Catherine Hickey, vice-president at consultancy Segal Marco Advisors, said most of the emerging market managers it uses now tend to invest directly into Chinese companies through the A-share market, which is increasingly open and liquid.Morgan Stanley also recommends exposure to China-listed A-shares, while expressing caution towards the MSCI China index, which has roughly one-fourth of its weightings in ADRs.

 

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