China Communications Construction shares surge on new expansion deal
Acquisition of Australian firm and inclusion of mainland mutual funds in stock connect cited in China Communications Construction's price rise
Recent sharp rises in the Hong Kong and Shanghai share prices of China Communications Construction have been attributed by analysts to the Chinese state-owned firm receiving approval to buy an Australian building firm, and to news that mainland funds can buy Hong Kong shares via the Shanghai-Hong Kong through train scheme.
China Communications Hong Kong share price surged 14.8 per cent on the day to close at HK$14.54 yesterday from HK$12.66 on April 2, while its Shanghai share price rose 8.6 per cent to end at 19.55 yuan yesterday from 18.01 yuan on Tuesday.
Australia yesterday approved the sale of one of its largest construction companies, John Holland, to China Communications.
The acquisition is "an important manifestation" of the Chinese government's one belt, one road strategy to build ports, roads, railways and other infrastructure linking China with Asia, Africa and the Middle East, said Li Xin, an analyst with Masterlink Securities.
"John Holland is a technologically advanced construction company, so the acquisition will be good for China Communications and the Chinese government," Li said.
John Holland has more than 5,600 employees in eight countries. China Communications is China's biggest dredger and port builder, with a presence in more than 80 countries.