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Stock Market

ZTE stock jumps after US lifts crippling supplier ban

The telecom giant's shares jumped in Chinese trading.

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ZTE is already seeing the benefits of the US lifting its supplier ban.

Manuel Blondeau/AOP.Press/Corbis, Corbis via Getty Images

ZTE's stock surged by 17 percent Monday morning after the company was freed from a crippling US supplier ban.

The Chinese telecom escaped the ban's shadow Friday when the US Department of Commerce announced that the company deposited $400 million in an escrow account, to be held to cover future violations.

The company's Hong Kong-listed stock opened up 5.5 percent, Reuters reports, and it rose more than 17 percent to 16.12 HK dollars ($2.05) by midday. The stock was 37 percent lower than it was in April, when trading was suspended for two months after the ban, the news gathering service noted.

Its Shenzhen shares rose by their 10 percent daily limit Monday morning.

The US Commerce Department issued the ban in May after the government determined that ZTE violated terms of its 2017 settlement by failing to fire or punish employees involved with illegally shipping US equipment to Iran and North Korea.

The seven-year ban crippled the company, which shut down major operations and left it unlikely to survive -- until President Donald Trump tweeted that he wanted the Commerce Department to work with ZTE on getting the ban lifted.

In June, the Commerce Department made a deal requiring ZTE to pay a total of $1.7 billion in penalties, including a $1 billion fine and the $400 million escrow deposit -- kicking off the long recovery process.