HONG KONG (Reuters) – Hong Kong’s largest tracker fund, managed by a State Street unit, will resume investing in stocks from which Americans are banned, it said in a statement on Wednesday, the latest global U-turn linked to a November executive order from Donald Trump.
The Tracker Fund of Hong Kong (TraHK), which follows the benchmark Hang Seng Index, was able to invest in the securities because neither it nor State Street Global Advisors Asia Ltd., the local unit which manages the fund, were “U.S. persons”, said a spokeswoman for State Street Global Advisors, the asset management unit of the U.S. custodian bank.
In an exchange filing on Wednesday TraHK said that it would resume buying the shares on Thursday.
This marked a reversal from an exchange filing three days earlier, in which the fund said it would no longer invest in sanctioned securities set out in a list by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC).
OFAC’s list is linked to a November order from U.S. President Donald Trump banning Americans from investing in Chinese securities which the U.S. considers to have links with China’s military, with effect from Monday.
Hong Kong-listed shares of telecom firms China Mobile and China Unicom are on the OFAC list and constituents of the Hang Seng Index.
Last week, the New York Stock Exchange U-turned twice in seven days due to uncertainty about whether US-listed shares in those two telcos and a third, China Telecom, were covered by the executive order.
It first said it would delist the American Depositary Receipts of the three entities, then said it would keep them listed, citing an OFAC clarification, before finally confirming it would delist them.
(This story corrects paragraphs 6 and 7 to remove incorrect description of China Telecom as a Hang Seng Index constituent stock)
(Reporting by Alun John, editing by Louise Heavens and Chizu Nomiyama)
