Executive Disorder: Mapping the US Ban on Chinese Stocks
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The Average China Investor’s Portfolio (as of January 8, 2021) TheDenotes Average stocks banned China under US executive Investor’s order Portfolio (as of 8 Jan 2021) DATA INSIGHT Alibaba Meituan China Construction Ping An 9.4% Dianping Bank Insurance (H) Executive Disorder: 2.9% 1.6% 1.6% Mapping the US ban on Ping An China Merchants Ind. & Comm. Insurance (A) Bank (A) Bank of China Chinese stocks 0.9% 0.9% 0.8% Last November, the Trump administration JD.com Bank of China announced a ban on US investors holding 1.6% China Merchants 0.6% Bank (H) Chinese stocks with suspected military links. 0.5% With little initial guidance on which stocks CONSUMER DISCRETIONARY FINANCIALS were covered by the ban, investors were at Pinduoduo Tal Education 1.6% 0.6% first left guessing as to how their portfolios would be affected. Over the last few weeks, China Tourism however, updates from the Treasury and moves 0.5% NIO by index providers to drop offending stocks 1.3% have gradually filled in the blanks, leading to an emerging picture of the executive order’s New Oriental Edu. impact on major benchmarks. Despite some 0.6% big names, like China Mobile and CNOOC, Tencent NetEase Xiaomi HANGZHOU 9% 0.9% 1.3% HIKVISION falling on the US government’s blacklist and 0.5% grabbing headlines, the overall weight of SMIC (H) 0.3% banned stocks at the beginning of 2021 was CHINA MOBILE 0.7% SMIC (A) relatively modest, totaling less than 3% of 0.1% weight in the average China investor’s portfolio, COMMUNICATION SERVICES INFORMATION TECHNOLOGY and concentrated among telecom shares, IT CHINA UNITED NETWORK DAWNING INFO. IND. 0.1% 0.1% stocks, and industrials. CHINA UNICOM 0.1% This chart is for informational purposes Baidu 1.3% CHINA TELECOM and should not be relied upon for investing 0.1% Kweichow Moutai Contemp. 2.5% Amperex Tech decisions. The banned stocks herein may be 0.8% incomplete, and additional stocks may be banned in the future. Please consult a legal professional before determining specific CONSUMER STAPLES INDUSTRIALS MATERIALS banned securities. Wuliangye Foshan Haitian CHINA RAILWAY Yibin Flav. CONST. (A) 1.1% 0.5% 0.1% CHINA COMM. CONST. (A) CHINA RAILWAY CHINA SPACESAT 0.03% CONST. (H) 0.02% Wuxi 0.04% ( ) Biologics CRRC CORP. A CRRC CORP. (H) 0.9% 0.1% 0.03% CHINA COMM. CONST. (H) CNOOC 0.04% 0.4% Source: Rayliant Research, Bloomberg, US Treasury. The Jiangsu Hengrui average China investor’s portfolio is assumed to track 0.6% the MSCI China All Shares Index. Banned stocks taken HEALTH CARE REAL ESTATE UTILITIES ENERGY from US Treasury list as of January 8, 2021. Cells sized in proportion to their index weight as of December 31, 2020, and stocks with weight of at least 0.5% labeled. Source: Rayliant Research, Bloomberg, US Treasury. The average China investor’s portfolio is assumed to track the MSCI China All Shares Index. Banned stocksDenotes taken from stocks US Treasury banned list as under US executive order of January 8, 2021. Cells sized in proportion to their index weight as of December 31, 2020, and stocks with weight of at least 0.5% labeled. This chart is for informational purposes only and should not be relied upon for investing decisions. The banned stocks listed herein may be incomplete, and additional stocks may be banned in the future. Please consult a legal professional before determining what specific securities are banned..