By Dickie Wong, associate editor
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An engineering company owned by Chinese billionaire Li Ka-shing will delist its stock from the New York Stock Exchange on Monday, which could spark a major exodus of Chinese stocks off the Big Board, dealers say.
If the move is successful, other China-based companies that have listed on the Big Board will follow suit.
The decision by Li’s China Petroleum & Chemical Corp. (NYSE: SNP) to switch its headquarters from Shanghai to the Caribbean island of Antigua underscores increasing pressure on companies in mainland China to move their headquarters overseas as the country’s state-owned energy and telecommunications giants join domestic businesses such as banks to seek greener pastures.
China Petroleum, better known as Sinopec, will separate operations from its parent corporation to allow the exploration and production company to operate as a separate entity. Sinopec’s U.S. listing has been one of the largest in China, but it’s been traded below the Big Board’s $20 opening price since the 2008 financial crisis.
Sinopec’s formal delisting from the New York Stock Exchange will take effect June 2, but will take effect Monday, when the company reports first-quarter earnings.
The move will leave Sinopec as one of the Big Board’s biggest non-U.S. listings, but it will still rank about 20th in terms of market capitalization. Sinopec stock is now traded on the Shanghai and Shenzhen exchanges, the only stocks allowed to trade freely on the mainland.
And while China Petroleum may be one of the largest non-U.S. companies on the exchange, it’s only the latest Chinese company to move its offices.
Other Chinese-based companies that are moving the majority of their operations overseas include:
• Anadarko Petroleum (NYSE: APC), which says half of its business will be taking place overseas by the end of 2011
• ZTE, China’s No. 3 telecommunications equipment maker, which is shifting its headquarters to Germany
• Fosun International, China’s biggest private conglomerate with investments in insurance, agriculture, energy and real estate, which has moved its head office to Switzerland.
• The head office of the China Housing and Land Development Group, the country’s biggest real estate company, relocated to Hong Kong from Shanghai last year.