The telecommunications company, the fourth in the world, reopened trading today, after a two month suspension. ZTE has to pay a fine to the US for violating the embargo on sales in Iran and North Korea. But the agreement reached risks being cancelled by the US Senate.
Hong Kong (AsiaNews) - ZTE technology shares plummeted by 39% on the Hong Kong stock exchange today, dropping10% on Shenzhen. Trading had reopened after two months of suspension.
Last April, the US Department of Commerce accused the ZTE of violating the trade ban on North Korea and Iran. This resulted in a trading ban and the prohibition to buy micro components from the USA for its products.
The ZTE was then forced to stop most of its operations and on April 17 stopped trading on its shares on the stock exchange.
Last week the United States reached an agreement with the ZTE to remove the ban. In return, the technology giant would have paid $ 1 billion and would have changed its leadership, leaving the verification of compliance to a group approved by the US.
According to analysts, today’s collapse, at the reopening of trading, is partly due to ZTE’s difficult transition in changing administrative staff and partly due to the fact that the United States Senate is about to vote a law that could block the agreement because of national security. The agreement with the ZTE was seen as an example of dialogue on trade between the United States and China, in an attempt to avoid a tariff war and find a greater trade balance between the two countries.
The ZTE has a market value of 19.28 billion dollars and is the fourth largest telecommunications company in the world after Huawei, Erickson and Nokia.