Four companies controlled by Aviation Industry Corp of China, the government-owned planemaker, halted trading of their shares amid a wave of consolidation of the nation’s state-held enterprises.
China Avionics Systems Co., AVIC Electromechanical Systems Co. and AVIC Aircraft Co. suspended their stocks starting Wednesday, pending announcements on “major items,” according to statements to the Shanghai and Shenzhen stock exchanges. AVIC Capital Co. has been halted since Thursday awaiting news.
The suspensions came as China starts to overhaul its state-run companies in an effort to improve their efficiency and bolster an economy growing at the slowest pace in more than two decades. The State Council approved a plan to create two new sets of companies to oversee and channel funds to government enterprises in the biggest reform effort in more than a decade, the South China Morning Post reported Sunday.
The government may merge its two major shipping companies, China Shipping Group and COSCO Group, people familiar with the matter said last week. Shares of the two groups’ listed units are suspended pending announcements from their controlling holders.
The Communist Party Politburo said at its midyear economic work conference that reform of SOEs is one of three key reform priorities for the second half of the year, CICC analysts led by Hanfeng Wang wrote in a research note Monday.
Mergers of shipping and aviation giants would follow the combination of state-owned CSR Corp. and China CNR Corp. in May to form CRRC Corp., a train equipment maker that dwarfs foreign rivals Siemens AG and Alstom SA. The merger is aimed at creating economies of scale that will help China compete more aggressively for overseas rail deals.
Shares of China’s state-owned enterprises surged on Monday after publication of the South China Morning Post article.