Tangshan Port Shares Soar on Coal Clampdown Rumors
Shares of Tangshan Port Group Co Ltd soared 7 percent on Tuesday, to post their biggest daily percentage gain in nine months, as investors bet the small port would benefit from a major clampdown on coal transportation at its larger rival.
Shares in the Hebei-based company trading on Shanghai stock exchange jumped to 4.6 yuan ($0.67), their highest since Nov. 15, on Tuesday before ending the session at 4.52 yuan.
Trading volume was also higher than usual with 121 million shares, the highest in a year. The stock posted its biggest daily percentage gain since May 13 last year.
The buying spree came after Reuters reported on Monday that China's Ministry of Environment is considering stopping Tangshan's neighbouring rival Tianjin Port Co Ltd, China's second largest by cargo volume, from handling coal by July.
Tianjiin shares closed 2.09 percent higher at 10.73 yuan per tonne. At least 19 million shares were traded.
It's not yet known when the government will decide whether to implement the plan, but the draft policy document seen by Reuters showed a radical proposal to divert coal shipments to Tangshan, 130 km (80 miles) to the north.
"There may be an increase of coal loading and unloading activity at Tangshan port," said Fan Ming, a Shenzhen-based analyst at Guotai Junan.
Tianjin, a key hub for coal, handles about 100 million tonnes of seaborne coal and domestic coal every year, which flows south from Inner Mongolia.
Tianjin is larger by revenue and cargo volume than Tangshan, although Tangshan is larger by market capitalisation, with 19.2 billion yuan compared with Tianjin's 17.96 billion yuan.
Reporting by Josephine Mason and Meng Meng