Shares of both China-owned shipping companies took a beating yesterday when trading resumed after a months-long suspension due to a pending merger deal.
Stock in both China COSCO Holdings, parent of the container carrier COSCO, and China Shipping Container Lines dropped dramatically yesterday when trading resumed after a being suspended for much of the past few months.
The state-owned shipping companies initially suspended trading on the Hong Kong stock exchange Aug. 10 as they began discussions regarding a potential merger.
COSCO and CSCL over the weekend unveiled plans for their consolidation deal, which would create the fourth largest ocean carrier worldwide with 288 containerships with 1.6 million TEUs of capacity. According to statements from the companies, the terms of the agreement would include CSCL essentially exiting the container shipping business entirely.
On Nov. 13, when shares of both companies were reopened briefly, stock in COSCO and CSCL closed at Hong Kong $4.96 (U.S. $0.64) and HK$3.11, respectively. When trading resumed yesterday, COSCO stock dropped more than 28 percent to HK$3.55, while CSCL fell over 26 percent, closing at HK$2.30.
Shares of China COSCO Holdings rebounded slightly Tuesday, closing up 2.25 percent at HK$3.64, but CSCL has continued to slide, ending the day down another 3.06 percent to HK$2.22.
COSCO, CSCL stock sinks following merger announcement
