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Thursday, August 11, 2022

Shanghai stocks surge more than five percent

Shanghai stocks surge more than five percentSHANGHAI: Shanghai shares surged more than five percent on Monday afternoon on speculation of a merger between two major state-owned shipping enterprises, despite weak economic figures released over the weekend, dealers said.

The benchmark Shanghai Composite Index was up 5.02 percent, or 187.84 points, to 3,932.04.

The Shenzhen Composite Index, which tracks stocks on China’s second exchange, gained 4.65 percent, or 101.25 points, to 2,278.40.

China is planning to combine two major state-owned shipping companies — China Ocean Shipping (Group) Co., known as Cosco, and China Shipping (Group) Co. — or merge some of their businesses, Bloomberg News reported, quoting people familiar with the matter.

Several listed arms of the two giants halted trading in their shares on Monday in both Shanghai and Shenzhen, as well as in Hong Kong, where some are also listed.

The merger speculation, which Bloomberg News said comes as part of a broader overhaul of inefficient state-run companies designed to bolster growth, outshone weak economic data released over the weekend.

China’s foreign trade performance worsened in July with both exports and imports falling on an annual basis, customs said on Saturday.

Consumer inflation accelerated slightly to 1.6 percent in July, compared to 1.4 percent in June, official data showed on Sunday, although analysts warned the slow rise in prices is still a risk for China’s economy.

“State-owned enterprise mergers are an investment theme that’s quite certain and there are signs that the move will speed up,” Li Jingyuan, general manager at Shanghai Zhaoyi Asset Management, told Bloomberg News.

“Foreign investors pay more attention to economic data and fundamentals, while local investors are more sensitive to policies,” Li said.

Copyright AFP (Agence France-Presse), 2015

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