Photo: Xinhua

The New York Stock Exchange (NYSE) will commence the proceedings to delist shares of China National Offshore Oil Corp (CNOOC) in early March, a step which experts said shows the US' toughening position on Chinese companies listed in the US and would cause a slump of CNOOC shares on the Hong Kong market.

The NYSE said on late Friday that it will suspend trading of CNOOC's American depository shares on March 9. It has not disclosed when the delisting process will be finished.

CNOOC didn't respond to interview requests as of publication.

The Chinese state-owned juggernaut, often known as one of China's "three barrels of oil", went public on both the Hong Kong and New York Stock Exchanges in February 2001.

The NYSE took action against CNOOC to comply with an executive order issued by former US president Donald Trump that prohibits US companies from investing in firms related to the Chinese military, as they made a list of such Chinese companies that includes CNOOC, China Mobile and Huawei among others.

Xi Junyang, a professor at the Shanghai University of Finance and Economics, said that the US move will likely cause the company's shares to slump on the Hong Kong bourse.

"The delisting shows that NYSE has negative judgment about the CNOOC's business nature, which would trigger doubts and pessimistic sentiments among its investors," Xi told the Global Times, predicting there will be a sharp plunge in price of the company's shares next week.

CNOOC's shares dropped by 6.19 percent to HK$ 9.25 ($1.19) on the Hong Kong bourse on Friday.

According to Xi, it will be just the start for such delistings, even though the Biden administration has shown a sort of ambiguous willingness to relax crackdown on China. It's still unlikely the new administration will completely smooth out China-US relations.

"What the US-listed Chinese companies will undergo is hard to say now, but considering the thorny China-US ties in recent years, it's likely that more Chinese companies will be delisted from the US stock exchange," he said.

It is only hard to say if there will be an avalanche of such delistings, as it depends on Biden's actual attitude toward China, he noted.

He also predicted that the number of IPOs by Chinese companies on US stock markets will shrink by at least 20-30 percent this year, as a result of such actions.