ZTE shares down over 3 percent after U.S. Congress report

HONG KONG Sun Oct 7, 2012 9:51pm EDT

A ZTE company logo is seen at the company's exhibition pavilion during the CommunicAsia information and communications technology trade show in Singapore June 19, 2012. REUTERS/Tim Chong

A ZTE company logo is seen at the company's exhibition pavilion during the CommunicAsia information and communications technology trade show in Singapore June 19, 2012.

Credit: Reuters/Tim Chong

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HONG KONG (Reuters) - Shares of ZTE Corp (0763.HK) 000063.SZ, China's second-largest telecom equipment maker, fell by more than 3 percent after a U.S. Congress report said the company and its bigger Chinese rival, Huawei, should be kept from the U.S. market due to security reasons.

ZTE's Hong Kong-listed shares fell by as much as 3.4 percent to HK$12.94 on Monday, underperforming the main Hang Seng Index's .HSI 0.2 percent decline.

China's top telecommunications gear makers should be kept from the U.S. market because they cannot be trusted to dodge Chinese state influence and thus pose a security threat, the U.S. House of Representatives' Intelligence Committee leaders said in a draft of a report to be released Monday.

(Reporting by Lee Chyen Yee; Editing by Anne Marie Roantree)

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