ZTE shares leap 25% with end of US purchase ban in sight
The US had imposed the penalty after it said ZTE failed to take action against staff who were responsible for violating trade sanctions against Iran and North Korea
Hong Kong — Shares in Chinese telecoms equipment maker ZTE surged more than 25% in Hong Kong on Thursday after the company moved a step closer to having a painful US purchase ban lifted. The firm had been forced to halt operations and was on the verge of collapse after Washington announced a seven-year ban on US companies selling it crucial parts, owing to its handling of a sanctions violation. However, as a favour to Chinese President Xi Jinping, US President Donald Trump ordered the commerce department to ease the penalties and replace it with an order to pay a $1bn fine and put $400m in an escrow account to cover any future penalties for violations. It was also ordered to replace its board of directors and retain outside monitors. On Wednesday, ZTE signed an escrow agreement, meaning the sanctions could be lifted as soon as Thursday. The news sent shares in the firm 25.13% higher in Hong Kong to end at HK$13.94. Still, it is sharply down from the HK$25.60 it was at before trading...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.