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China Shipping Group pledges $49m share buyback on subsidiaries

China Shipping Group pledges $49m share buyback on subsidiaries
China Shipping Group (CSG) has pledged to use RMB305m ($49.1m) to buy back shares of its two listed units, China Shipping Container Lines (CSCL) and China Shipping Development Corp (CSDC), as part of efforts to combat the falling Chinese stock markets.

Shanghai-listed CSG announced that its rescue plan entail buying back close to 10m A shares of CSCL with RMB154m within six months.

The parent group will also buy back 7m A shares of CSDC with RMB151m within six months as well.

On Wednesday, the Chinese government reacted to the swift and steep fall of the Chinese stock market by disallowing investors holding stakes of more than 5% to sell shares in the next six months. Chinese stock market share values have lost nearly 30% below their June peak until the middle of this week.

On Thursday, Chinese shares reacted to the new rules and rebounded to close up 5.76%, its biggest percentage gain since 2009.

CSG said its latest move to protect the share prices of both CSCL and CSDC is in accordance with the planning of the State-owned Assets Supervision and Administration Commission of the State Council.