Investors weigh blocked China companies as Sino-U.S. chill deepens

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Investors face uncertain rules and could miss out on promising opportunities after index makers cut some blocked Chinese firms from their books, according to money managers and attorneys.

People are seen on a pedestrian overpass with an electronic board showing the Dow Jones and S&P 500 indexes, following an outbreak of the novel coronavirus in the country, at Lujiazui financial district in Shanghai, China March 13, 2020. REUTERS/Aly Song/Files

The executive order by U.S. President Donald Trump, published last month, barred U.S. investors from buying securities of restricted firms starting in November 2021, based on their alleged ties to the Chinese military. “As the executive order sits there is no required forced selling per se,” said Salman Niaz, a bond fund manager and head of Asian credit at Goldman Sachs Asset Management in Singapore, “When the detailed regulations come out we will know exactly what it means.”

Because many of the concerns raised by the United States are bipartisan, Greer said, “I don’t think there is going to be a lot of political or popular pressure to roll this back quickly.”

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