Cnooc Shares Slump After Removal from Indexes

Shares in Cnooc slumped on January 22 after UK stock market indices provider FTSE Russell announced it would delete the Chinese offshore producer from global and China indexes, following the introduction of US sanctions on the company. 

Under former president Donald Trump, the US imposed another round of sanctions against Chinese state-owned entities including Cnooc earlier this month for aggression against states with rival territorial claims in the South China Sea, forbidding US citizens from doing business with them. Officials later clarified that the measures did not apply to Cnooc's joint ventures outside the disputed region.

In a statement on January 22, FTSE Russell said it would remove the Hong Kong-listed stock from FTSE's global indexes and the FTSE China 50 Index on January 27. A day earlier US indices provider MSCI also said it would delete Cnooc from the MSCI ACWI and MSCI China All Shares indexes. S&P Dow Jones took a similar step in mid-January.

Stock in Cnooc in Hong Kong fell from HK $8.35/shares at 14:00 on January 21 to HK $7.80/share at the same time on January 22. A new low of HK $7.66/share was reached 09:30 on January 25, but the price has since rebounded to HK $7.79/share.

New US president Joe Biden has been very critical of his predecessor's policy towards China, including the trade war that Washington launched in 2018. But he has not said whether he will reverse any sanctions decisions.