Singapore-listed Yangzijiang Shipbuilding saw its share price rally by more than 7% on the news that the shipyard group’s chairman Ren Yuanlin is back at work.
The company's shares surged to SGD 1.07 ($0.79) to SGD 1.15.
The shipyard boss took a four-month break from the company in August to assist the Communist Party of China in an investigation of Jingjiang city official Liu Jianguo.
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A shipbuilding source familiar with Yangzijiang said Ren returned to his desk at the yard toward the end of last week.
Ren’s absence led to significant turmoil for Yangzijiang shares trading on the Singapore Exchange including a trading halt, a stock exchange query, and share buybacks by the company. Its share price plunged by about 23% at the time, from SGD 1.30 to SGD 1.
As TradeWinds reported in August, Liu was under investigation by an internal party body for “suspected of serious violations of the law”, according to an announcement by Beijing’s Central Commission for Discipline Inspection (CCDI), the organ of the Communist Party of China that investigates infringements by party members.
Liu, closely associated with the development of the shipbuilding industry in the region where Yangzijiang is located, had also served as chairman of management committee of the Ren's private Jiangsu Yuanlin Charity Foundation, with decision-making authority over its funds.
Market analysts in Singapore said they expected Yangzijiang's share price to improve when the company announced several weeks ago informing investors that Ren would soon be back.
"We believe that the chairman’s return is a very positive development and may lead to a strong rebound in Yangzijiang’s share price which has taken a hit despite the management’s assurance that Ren’s absence was not related to the company’s shipyard business and has not affected its day-to-day operations," DBS Group Research analyst Ho Pei Hwa said in The Business Times after the announcement of Ren's return.
Trade boost
One analyst also attributed the hike in Yangzijiang’s share price to optimism over the US-China trade relationship.
Based in Jingjiang in Jiangsu province, Yangzijiang is China's largest privately-owned shipyard.
It entered a joint-venture shipyard-deal with Japan’s Mitsui E&S Shipbuilding in August called Jiangsu Yangzi-Mitsui Shipbuilding.
The joint yard plans to build mid-size LNG carriers before progressing on to 180,000-cbm ships.
