Stocks of U.S. suppliers to ZTE soar after Trump's comments
Shares of American companies that supply chips and other components to Chinese telecom equipment maker ZTE Corp. rebounded strongly on Monday, after U.S. President Donald Trump said that Washington and Beijing are working to get the company back into business.
Shares of Acacia Communications Inc., a Massachusetts-based optical interconnect components maker selling about 30 percent of its products to ZTE in 2017, spiked 8.73 percent to 34.25 U.S. dollars apiece following Trump's remarks.
Shares of Oclaro, a U.S.-based company that made 18 percent of its revenue from ZTE in the fiscal year that ended July 1, 2017, surged 2.92 percent to 8.82 dollars apiece.
Shares of Lumentum, another U.S. firm that also does substantial sales to ZTE, jumped 2.22 percent to 64.50 dollars apiece.
All those stocks have suffered big losses since the United States imposed a denial of export privileges against ZTE on April 16.
View of a signboard of ZTE during an exhibition in Nanjing, Jiangsu province [File photo: IC]
The two sides "are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast," said Trump on Sunday in a tweet. The president added that he has instructed the U.S. Commerce Department "to get it done."
China appreciates the U.S. position on ZTE, Foreign Ministry spokesperson Lu Kang said Monday, adding that China is keeping close communication with the United States on specific details and issues that the U.S. side is concerned about.
Trump's words came ahead of a new round of trade consultations between the two sides later this week.
Analysts said that the latest development in trade tensions between the United States and China, the world's two largest economies, eased concerns about a potential trade war.
ZTE, one of the world's largest telecom equipment makers, was forced to suspend its main operations worldwide after the U.S. Commerce Department prohibited American companies from exporting products to it in mid-April.
As the fourth-largest mobile phone supplier in the U.S. market, ZTE said it has estimatedly supported some 130,000 high-tech jobs in America.