Trump’s China Investing Ban Spurs Broad Wall Street Pullback
- Confusion over ban has some firms erring on side of caution
- Liquidity in affected bonds has worsened, fund managers say
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Two months after Donald Trump issued an executive order banning U.S. investments in Chinese military-linked companies –- and more than a day after it took effect -- the financial industry is still struggling to figure out what it can and can’t do under the new rules.
The lack of clarity has prompted some Wall Street firms to err on the side of caution, meaning the ban could have a broader market impact than initially envisioned. Two bond fund managers in Asia said it has become increasingly difficult to sell notes of affected companies because many brokers have pulled back from dealing in the names. The managers asked not to be identified discussing private information.