(Corrects to show Commerce Ministry on Aug. 22 reiterated an earlier State Council approval for the free-trade zone, date of AFP report in fourth paragraph. )
Sept. 6 (Bloomberg) -- China Shipping Container Lines Co. surged the most in six years on higher freight rates and after media reports said foreigners may be allowed to take bigger stakes in shipping ventures in the Shanghai Free-Trade Zone.
The Shanghai-based container unit of the nation’s No.2 shipping group jumped by the daily limit of 10 percent at the close of trading in Shanghai. Cosco Shipping Co., a unit of China’s biggest shipping group, also climbed by 10 percent. The benchmark Shanghai Composite Index gained 0.8 percent.
“Investors are betting shipping firms will benefit from the free-trade zone,” said Lawrence Li, an analyst with UOB Kay-Hian Holdings Ltd. “Freight rates also improved recently on China’s stabilizing economic growth and rising demand for goods from Europe and the U.S. before the traditional Christmas peak season.”
China may allow wholly foreign owned international ship management companies in Shanghai’s trade zone, Agence France-Presse reported yesterday, citing a draft plan. Limits on foreign investment proportions in joint-venture international shipping companies will be relaxed in the trade zone, while non-Chinese flag ships owned or controlled by Chinese companies will be allowed to carry out domestic container operations, AFP reported.
The Ministry of Commerce on Aug. 22 reiterated an approval from the State Council for Shanghai to set up a free-trade zone, spurring rallies for port operators. Shanghai International Port (Group) Co. has surged 136 percent since then.
The Baltic Dry Index, the benchmark freight rate for hauling commodities, jumped 5.3 percent to 1,279, the highest since January 2012.
“We view the worst as behind us, but full recovery will take time,” Goldman Sachs Group Inc. analysts led by Ronald Keung said in a note today.
To contact the reporter on this story: Jasmine Wang in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: Anand Krishnamoorthy at email@example.com