Sino­trans leads China ship­ping jump as ri­vals sus­pend trade

The Pak Banker - - COMPANIES/BOSS -

BEI­JING: Sino­trans Ship­ping Ltd. led a rally among Chi­nese ship­ping com­pa­nies Mon­day as ri­val com­pa­nies con­nected to China Ship­ping Group and COSCO Group sus­pended trad­ing on plans for "ma­jor is­sues." Sino­trans surged by as much as 10 per­cent to its high­est level since June 29 in Hong Kong trad­ing and was up 6.2 per­cent at HK$1.90 at 11:04 a.m. lo­cal time. China Ship­build­ing In­dus­try jumped 9.8 per­cent in Shang­hai, while China CSSC Hold­ings was up by the max­i­mum 10 per­cent limit in Shang­hai.

China is con­sid­er­ing merg­ing China Ship­ping Group and COSCO Group, its two ma­jor ship­ping com­pa­nies, amid a broader over­haul of in­ef­fi­cient state-run com­pa­nies to bol­ster an econ­omy grow­ing at the slow­est pace in more than two decades, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. Over­ca­pac­ity has kept ship­ping rates slug­gish for years, while ship­yards now are strug­gling with de­clin­ing or­ders. "They're try­ing to grow their economies of scale to bet­ter com­pete with their big­ger ri­vals," said Um Kyung A, an an­a­lyst at Shiny­oung Se­cu­ri­ties Co. in Seoul. "By com­bin­ing the two they will be able to of­fer their cus­tomers more ser­vices and ma­jor routes," The gov­ern­ment may com­bine the two com­pa­nies or merge some of their oper­a­tions, ac­cord­ing to the peo­ple, who asked not to be iden­ti­fied be­cause the de­lib­er­a­tions aren't public. China Cosco Hold­ings Co., China Ship­ping Con­tainer Lines Co. and China Ship­ping De­vel­op­ment Co. are among con­nected listed en­ti­ties that sus­pended trad­ing in their Hong Kong and Shang­hai shares from Mon­day.

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