Crash derails shares of rail companies
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Shanghai Daily, August 12, 2011
Shares of railway-related companies were derailed yesterday following China's decision to put the brakes on the country's high-speed rail services following a deadly train crash in Zhejiang Province last month.
China Railway Group Ltd plunged as much as 7.4 percent to HK$2.14 (41 US cents) yesterday, the lowest intraday price since its debut in 2007 in Hong Kong. It closed 6.1 percent lower at HK$2.17.
In Shanghai, the group suffered a smaller loss of 0.6 percent to close at 3.19 yuan (US$0.50).
The railway builder has also shelved its plan to sell as many as 1.52 billion A shares in a private placement due to a change in the government's "macro-policies," the company said in a statement.
China on Wednesday announced it will halt approval for all new rail projects as it carries out thorough checks on all high-speed lines.
Train maker CSR sank as much as 9.9 percent in Hong Kong and closed 7.6 percent lower at HK$4.39. In Shanghai, CSR shed 1.7 percent to end at 5.28 yuan.
