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Cosco and China Shipping share prices hammered in early trading

Shares of Cosco and China Shipping businesses have taken a hammering on the stock markets this morning, having resumed trading after the merger of the two companies was confirmed on Friday.

In Hong Kong as of 10:30am, China Shipping Container Lines shares are trading at HK$2.26 down a whopping 27.33%. China Cosco Holdings shares are down HK$1.12 to be trading at HK$3.84, a drop of 23.5% while COSCO Pacific, the ports and terminals business of Cosco is down more than 15% to HK$8.51.

In Singapore, Cosco’s shipbuilding arm Cosco Corporation (Singapore) is down 16% to be trading at S$0.31.

The only positive trading from amongst the group so far is China Shipping Development, which is up 2.55%, in line with the positive nature of the tanker market. In a research note this morning, analysts Jeffries rated the stock a BUY and said: “It is a swap of a loss-making business for a profitable business.”

Jeffries also said that investors in Cosco Pacific should be “disappointed” while on China Shipping Container Lines it said: “Letting go of the container liner operation is a welcoming move but taking on container leasing, manufacturing and banking does not inspire.”

According to a release over the weekend, the merged entity will have four professional clusters: container shipping, ports and harbors, oil and gas shipping and shipping and financial services, while dry bulk will be held separately by Cosco Group.

Grant Rowles

Grant spent nine years at Informa Group based in London, Sydney, Hong Kong and Singapore. He gained strong management experience in publishing, conferences and awards schemes in the shipping and legal areas, working on a number of titles including Lloyd's List. In 2009 Grant joined Seatrade responsible for the commercial development of Seatrade’s Asia products. In 2012, with Sam Chambers, he co-founded Asia Shipping Media.
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