MSCI Inc said it will remove five Chinese companies from its flagship global equity index as of the end of Jan 27 in the absence of an update on a Trump administration order banning Americans from investing in certain Chinese companies.
READ MORE: MSCI chops China firms from global indexes
President Joe Biden, who took office on Wednesday, is yet to spell out plans for Trump’s executive order forcing the divestment of the Chinese securities, but can easily revoke it
The five companies – CGN Power Co, China National Chem, China National Nuclear Power, China Shipbuilding Industry and Inspur International – will be removed from the MSCI ACWI Index, relevant non-market capitalization weighted indexes and custom indexes.
MSCI said on Monday it will delete the securities if there is no fresh guidance from the Office of Foreign Assets Control (OFAC) by 12 pm ET on Jan 26. OFAC is an agency within the US Treasury Department, which is responsible for enforcing sanctions.
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President Joe Biden, who took office on Wednesday, is yet to spell out plans for Trump’s executive order forcing the divestment of the Chinese securities, but can easily revoke it.
Former President Trump had banned Americans from investing in Chinese companies that the Defense Department says have ties to the military, an assertion many of the companies deny and which China’s government has said lacks evidence.