ZTE has been issued an export restriction by the US government based on investigations dating back to 2012 when the company allegedly shipped out components to Iran’s largest carrier, which is a violation of US sanctions. The restriction was imposed back in March, but ZTE managed to get reprieves since the company has been working with the US government on the said investigation.
According to news outlet Reuters, the export reprieve on ZTE has been further extended till February 2017, the 27th of the month to be exact. This would mean that the Chinese manufacturer will still be able to source from companies such as Qualcomm as it has been doing all this while. There seems to be no sign or hint of the company switching to non-US manufacturers ever since the restriction. This might mean that ZTE has been working hard to work its way around the ban, or to get it lifted.
A financial analyst from Hong Kong, Cindy Lam has speculated that the reprieve might turn out to be permanent, or in other words, the ban itself could very likely be removed, in which ZTE will be paying a penalty. The company has claimed that it will continue cooperating with the US government to come out with a solution, and will comply with the nation’s trade laws. ZTE’s shares haven’t been performing well since the ban was issued, which is down a significant 35 percent for the year. What do you think of ZTE’s trading habits?
Source: Reuters