NEW YORK (Bloomberg) - MF Global Ltd., the futures and options broker that lost two-thirds of its value this month, gained 2.9 percent in New York Stock Exchange trading after saying it freed up $800 million by amending an agreement with its former parent company. The stock rose as much as 13 percent.

Man Group plc., the world's largest publicly traded hedge fund manager, freed the brokerage from committing funds to secure over-the-counter contracts, Bermuda-based MF Global said on Friday. MF Global's market value plummeted 65 percent March 17 on speculation clients were withdrawing cash as Bear Stearns Cos. teetered on the edge of bankruptcy.

"I think it definitely addressed concerns about not having enough money" at the firm, said Rich Repetto, an analyst at Sandler O'Neill & Partners LP in New York. Mr. Repetto dubbed last week's share drop the "St. Patrick's Day Massacre II" and said "it hit several trading companies because of the environment created by the Bear Stearns situation."

MF Global said several times in the past two weeks that the rumours of client withdrawals were false, that it has enough capital and that it maintains an untapped $1.4 billion credit line. London-based Man Group spun off MF Global last year and is the firm's largest shareholder.

Mr. Repetto, who recommends his clients buy MF Global shares, said he had seen no evidence of clients withdrawing money from the firm, although there is no way to gauge that independently from what the company discloses.

"This change will substantially increase its available liquidity," MF Global said in a regulatory filing on Friday. The company expects to be able to use more than $400 million of that total in the next few weeks to fund "other operations." MF Global acts as a broker to hedge funds, investment banks and other large traders and also clears, or guarantees, some contracts for customers.

Shares of MF Global rose 28 cents, or 2.9 percent, to $10.01 as of 4pm in New York Stock Exchange composite trading. They earlier touched $11 a share, up 13 percent from the close of $9.73 on Thursday. The company closed on its first day of trading in July at $27.55, below the $30 initial public offering price.

The capital commitment between MF Global and Man Group was related to over-the-counter trades in foreign currency, the company said. Foreign currency OTC trades are typically settled 15 days after they are executed. The $800 million was used to protect Man Group against counterparty defaults, or to pay traders whose positions made money before settlement.

MF Global shares are trading at near their book value and not on an earnings growth basis, Niamh Alexander, an analyst at Keefe, Bruyette & Woods Inc. in New York, said in an interview. Investors will have to get comfortable that the company can continue to grow profit for the shares to rise, she said.

"It's certainly a speculative story now, but we're seeing incremental positives," Mr. Alexander said.

The brokerage disclosed a $141.5 million loss on February 28 from what it said were unauthorized trades by one of its brokers in Memphis, Tennessee, sending its shares down more than 44 percent over two days.

"Investors have been concerned about the potential for lost business at MF following the wheat futures loss and decline in the share price," Donald Fandetti, an analyst at Citigroup Inc. in New York, wrote in a note to clients on Friday. "Our sense is that customer loss has been manageable and that it's mostly been customers keeping less excess cash at MF."

Mr. Fandetti, who raised his price target today to $12 from $8 for the stock, recommends his clients hold MF Global shares.