News Desk
- Investors worried about Trump’s next move
- US believes firms have military ties
- Companies vehemently deny allegations
ISLAMABAD: United States (US) president-elect Donald Trump’s return to power has made investors nervous about the list of Chinese companies which might be targeted under his presidency.
According to Bloomberg, a long-ignored Pentagon watch list is now drawing the attention of traders seeking clues about who might be next.
The list includes companies that the US believes have alleged ties to the Chinese military.
Earlier this month, these fears triggered a stock selloff.
The companies
The companies include Tencent Holdings Ltd. and Contemporary Amperex Technology Co. Ltd., which makes batteries for Elon Musk’s Tesla as well as other automakers.
The selloff came despite the fact that being included on the so-called “1260H list” — named for the section of the annual defence bill it comes from — has no legal repercussions and doesn’t result in sanctions, according to Bloomberg.
Global macro strategist at BCA Research Marko Papic told the US publication, “The selloff is not so much because of what this list means but more about what it may presage for the companies going forward.”
It is step one toward more exclusions, restrictions and potential sanctions, Marko Papic said.
The selloff is not so much because of what this list means but more about what it may presage for the companies going forward.” – global macro strategist at BCA Research Marko Papic
The Pentagon list was mandated as part of an annual defence bill passed during the waning days of the first Trump administration to expose the connection between China’s military and commercial interests.
Significant impact
President Joe Biden’s team continued to add companies to the list, including those that appear to be civilian in nature.
Being placed on the list can have a significant impact. Shares in Tencent slumped about 10 per cent over the four trading sessions after the Biden administration included it on the defence blacklist.
Shares in CATL fell about three per cent. Both companies said they’re not engaged in any military-related activities.