CSIC, CSSC Dismiss Shipbuilder Merger Rumors

China's state-backed shipbuilding giants said they have not received any merger-related information from authorities, after an executive swap between the firms sparked a market rally in their shares.

The pair are the latest state firms to see merger rumours trigger jumps in their share prices, as investors expect the government to unleash a fresh round of industrial consolidation as part of reform of its state-owned enterprises.

Shares in China CSSC Holdings Ltd and China Shipbuilding Industry Co Ltd (CSIC) reached their 10 percent trading limit on Thursday after their parent firms announced that CSSC chairman Hu Wenming will now head CSIC among other management changes.

"The top management reshuffle at CSSC and CSIC has sparked market speculation that the two shipbuilders may merge" the companies said in near-identical statements issued late on Thursday to the Shanghai stock exchange.

"With respect to these merger rumours, the company and its parent have yet to receive any merger-related information from authorities."

Trading in the shares at both firms was comparatively subdued on Friday, with CSSC down 0.56 percent, and CSIC 0.48 percent higher at 0358 GMT.

Rail builders China Railway Construction Corp Ltd and China Railway Group Ltd similarly dismissed merger rumours on March 17 after local media reports triggered a surge in their share prices.

The mainland-listed shares of train makers China CNR Corp Ltd and CSR Corp Ltd each climbed more than 10 percent in the run-up to their merger announcement on Dec. 31.

 

Reporting by Brenda Goh