Concerns about Chinese companies being delisted from U.S. stock exchanges are escalating, according to TD Cowen. The firm places a 70% probability on forced removals given the increasing pressure from Congress and the current administration.

What’s Fueling the Pressure?

A recent letter sent to the SEC from representatives warns of potential national security risks and a lack of transparency in corporate governance, increasing scrutiny on companies like Alibaba.

TD Cowen indicates that executive orders sought by Congress could speed up this removal process, impacting numerous stocks significantly.

Critical Companies Under Scrutiny

This situation directly affects large-cap ADRs and individuals in the technology and manufacturing sectors that are frequently discussed in national security contexts.

Bottom Line:
If these pressures culminate in executive action, we could witness rapid declines in Chinese stocks traded on U.S. exchanges, fundamentally altering the landscape for foreign investments.