China Shipping Container Lines rose sharply
China Shipping Container Lines , the mainland's second-largest shipping line, rose sharply after disclosing talks with another party - thought to be its own parent company - over the proposed acquisition of a stake in another firm.
CSCL said in a statement to the Hong Kong stock exchange that "one of the company's subsidiaries is in negotiations with a connected person" over the proposed acquisition of shares of another company.
No spokesman was available to comment on details of the proposed acquisition.
The Shanghai-based company is said to be eyeing assets belonging to its own parent company, China Shipping (Group).
Chairman Li Shaode said last November that China Shipping will first integrate existing assets before injecting them into Hong Kong-listed CSCL.
The parent firm holds stakes in various cargo terminals, including three container manufacturing plants, 21 container berths, eight terminals and 10 percent of phase two of Shanghai Yangshan port.
Shares of the company rose 7.38 percent to close at HK$ 2.91 Tuesday.
Karen Chan, analyst at Credit Suisse, said the buoyant share price is partly a result of bullish sentiment in the shipping sector.
"We believe average freight rates will be flat this year but will increase by 5 percent in 2008," Chan said.
CSCL owns 151 vessels with a total operating capacity of 399,176 TEUs. It plans to build up its fleet to 170 vessels with a capacity of 524,000 TEUs by the end of 2009 to take advantage of continued export growth, said Chan.
But she is bearish over CSCL's full year results.
"Owing to its past capacity expansion, CSCL aggressively cut rates to increase utilization last year.We believe that full-year results will remain poor."
CSCL said in a statement to the Hong Kong stock exchange that "one of the company's subsidiaries is in negotiations with a connected person" over the proposed acquisition of shares of another company.
No spokesman was available to comment on details of the proposed acquisition.
The Shanghai-based company is said to be eyeing assets belonging to its own parent company, China Shipping (Group).
Chairman Li Shaode said last November that China Shipping will first integrate existing assets before injecting them into Hong Kong-listed CSCL.
The parent firm holds stakes in various cargo terminals, including three container manufacturing plants, 21 container berths, eight terminals and 10 percent of phase two of Shanghai Yangshan port.
Shares of the company rose 7.38 percent to close at HK$ 2.91 Tuesday.
Karen Chan, analyst at Credit Suisse, said the buoyant share price is partly a result of bullish sentiment in the shipping sector.
"We believe average freight rates will be flat this year but will increase by 5 percent in 2008," Chan said.
CSCL owns 151 vessels with a total operating capacity of 399,176 TEUs. It plans to build up its fleet to 170 vessels with a capacity of 524,000 TEUs by the end of 2009 to take advantage of continued export growth, said Chan.
But she is bearish over CSCL's full year results.
"Owing to its past capacity expansion, CSCL aggressively cut rates to increase utilization last year.We believe that full-year results will remain poor."
