Chinese electronics manufacturer Xiaomi, the third-largest maker of smartphones globally, is disappearing from FTSE Russell’s international stock market meters.
The company behind many leading stock market indices says it has to take this step due to an earlier decree by former US President Donald Trump.
The Trump administration blacklisted Xiaomi and a group of other Chinese companies just before Joe Biden took office. The company is said to have ties to the Chinese military, although Xiaomi firmly denies this. The operation prohibited Americans from owning stock in the company.
FTSE Russell is now forced to drop Xiaomi, which is listed on the stock exchange in Hong Kong, from the FTSE Global All Cap and FTSE Global China A Inclusion indices on March 12.
This is a severe blow to the company. Many institutional investors and passive investment funds hold precisely those stocks that are included in these types of indicators. With Xiaomi disappearing from that, many pieces of the company may be sold.
Xiaomi is also suing the US government for the blacklist. According to the company, it is unconstitutional and harmful. For example, it is now more difficult for the company to find capital to grow, Xiaomi argues.