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Former NYSE President Tom Farley weighs in on Chinese companies delisting from US exchanges - YouTube
Channel: CNBC Television
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several major chinese state-owned
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companies say they are voluntarily
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delisting from the new york stock
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exchange the firm's making the
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announcement and filings today the names
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include china life insurance sinopec
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aluminum corporation of china and
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petrochina and just to take a look at
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the impact on some of the other publicly
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listed companies we're seeing the
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pressure across the board on the chinese
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internet stocks as well and a bunch of
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chinese tech companies let's get to our
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guests here on set today tom farley is
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the founder chairman and ceo of far peak
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also the former president of the new
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york stock exchange so
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what's what's going to happen because
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the stocks trade as if there is a real
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possibility the stocks meaning the
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alibabas of the world that they are
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going to leave well let's start with the
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five that announced they are leaving for
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sure economically it's a non-event no
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big deal these shares trade
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very little here in the u.s the
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institutional ownership is very little
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here in the u.s they trade much more in
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their eight shares their hong kong
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listed shares so it really doesn't
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matter symbolically
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it's very important because this is
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china saying hey these are gone and the
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next batch to go are the alibabas the
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jd's
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that would be a big deal both
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economically and symbolically
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uh frankly i think
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what you saw this morning means you
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aren't going to see any more chinese
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ipos here on the new york stock exchange
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on on on the nasdaq or at least not very
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many i look people all around the world
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have built businesses and they've said
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we want to list on the new york stock
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exchange why because it's credible
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the market cap of u.s listed companies
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is 50 billion the next closest country
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is china and hong kong combined not even
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half of that so not only is it
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symbolically important in terms of
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credibility but you come here because
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it's where the money is this would hurt
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alibaba this would hurt jd.com this
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would hurt mother china but this dispute
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may end up being intractable and you
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very well may see these companies pick
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up and go home if this negotiation
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doesn't improve markedly how much does
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this hurt investors here or exchanges
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here i mean if you were still president
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of the nyse would you
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be you know chewing your nails sitting
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at the edge of your seat wondering
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what's going to happen next because
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alibaba with all its volume might go
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away well i'm sure the new york stock
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exchange is involved in the conversation
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uh so my successor current president
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lynn martin i'm sure is clued into this
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conversation both with the sec
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but but but also with congress but yes
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absolutely i'd be incredibly nervous i
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mean alibaba's worth what is it 300 400
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billion dollars held by american
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investors any d-listing is messing messy
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pardon me it destroys value for those
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shareholders the new york stock exchange
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will lose quite a bit of
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volume uh jd.com listed here in nasdaq
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quite a bit of volume associated with
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that the listings fees so yes it's
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important all that said the reason why
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people want to list on the new york
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stock exchange is because of the rule of
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law because these companies can be
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inspected so over the long term to
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maintain that gold standard you need to
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have very high standards and that's what
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this is it's a balance between investor
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access and and and the market
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protections required to run a credible
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market it's about auditing and
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accounting it's it's about investors
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being able to access company information
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which beijing doesn't want the us to
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necessarily have that's that's the
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concern
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um
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do you think ultimately that that baba
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goes though
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yes on this trajectory on this
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trajectory yes but look everything is uh
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the tension is being heightened on a
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daily basis between the u.s and china
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may witness nancy pelosi's visit to
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taiwan so that's kind of the crash
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course that we're on that could clearly
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change it could come after xi gets a
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third term it could be come because of
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some detent formed directly between the
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csrc the chinese regulatory body and the
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sec so
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there's probabilities associated with it
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but i don't like the path that we're on
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right now and that's why the markets are
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sending alibaba down another another
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three percent this morning yeah in terms
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of new listings you mentioned the ipo
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pipeline from china is probably frozen
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at this point non-existent
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in terms of growth for the exchanges how
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will that impact them if that
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future market all those companies there
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especially tech companies
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no longer come to the us it's it's not a
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good thing but uh the percentage of
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chinese new listings over the last two
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or three years has been very very small
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so it won't have a much of a near-term
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impact relative to last year or or the
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year prior but look these five companies
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they left today two trillion a market
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cap something of that ilk there's
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another couple trillion of chinese
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companies so it'll make a dent it won't
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it won't necessarily be the end of the
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world but it'll make a dent
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shepard smith here thanks for watching
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cnbc on youtube
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