Shenzhen-listed shares of China's ZTE surge 10 percent in resumed trade

Reuters News
Posted: Mar 16, 2017 1:37 AM

HONG KONG (Reuters) - Shenzhen-listed shares of Chinese telecom equipment maker ZTE Corp jumped 10 percent on Thursday, resuming trading after a nine-day halt and catching up with gains in its Hong Kong shares that were sparked by the settlement of a U.S. sanctions case.

ZTE said earlier this month that it had agreed to pay nearly $900 million in the U.S. sanctions case and on Tuesday said its chairman had resigned "in order to improve the company's management by differentiating the role of chairman and president".

The company's Shenzhen-listed shares were suspended on March 7, pending the announcement on the U.S. fine. Its Hong Kong-listed shares continued to trade and have jumped nearly 16 percent over that period.

A five-year investigation found ZTE conspired to evade U.S. embargoes by buying U.S. components, incorporating them into ZTE equipment and illegally shipping them to Iran.

In addition, it was charged in connection with 283 shipments of telecommunications equipment to North Korea.

On Tuesday, it named Yin Yimin as its new chairman.

Its Shenzhen-listed shares surged 10 percent, the maximum allowed daily limit, on Thursday to 16.81 yuan, their highest level in three months.

The Hong Kong-listed shares were flat, lagging a 1.3 percent gain for the benchmark Hang Seng Index.

ZTE relies on U.S. suppliers for 25 percent to 30 percent of its components, many of which are key to its goods.

As part of the U.S. agreement, the Commerce Department will recommend ZTE be removed from a list of entities that U.S. firms cannot supply without a license if it lives up to its deal and a court approves its agreement with the Justice Department.

(Reporting By Anne Marie Roantree; Editing by Muralikumar Anantharaman)