=MARKET BUZZ: Mobi Development Jumps On ZTE Rally; Fates Are Tied: Everbright SHK
HONG KONG (Jul 12) -- Shares of Mobi Development, whose largest client is ZTE, rallies 10.3% to 96 Hong Kong cents; gains aided by rally for ZTE, which is up 25.1% to HK$13.94 in Hong Kong, after U.S. Commerce Department tweets that it signed an escrow agreement with ZTE and will issue a notice lifting an export ban to ZTE once ZTE pays $400 million as escrow deposit. "Mobi Development relies very much on ZTE and therefore we see a strong rebound today, but I don't know if it can rise any further," says Kenny Wen, a wealth management strategist at Everbright Sun Hung Kai; adds Mobi shares the same future with ZTE. Advises against chasing ZTE shares up after rally today, on belief that they're unlikely to return to HK$20-HK$30 in future. Fred Wong, fund manager at eFusion Capital, says it's "not easy" for ZTE to completely recover, since most key operations will be under U.S. monitoring, and many projects could be affected. Wong expects "big write-offs" on accounts receivable and inventories by ZTE in next earnings report.
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