|
|
 |
 |
- |
|
Sinopec shares hit after chief resigns
By Fulton Mak
Shares of refiner China Petroleum & Chemical Corp (0386), better known as Sinopec, tumbled Monday as investors rattled by the news of chairman Chen Tonghai's resignation dumped the stock.
Although there are no obvious indications that Chen's exit would have an immediate impact on the leading refiner, investors cashed out.
Sinopec's yuan-denominated A shares plunged 5.74 percent to 13.47 yuan while its H share closed at HK$8.79, down 2.87 percent or 26 HK cents. A total of 207.4 million shares changed hands with turnover of HK$1.84 billion. The stock recorded the fourth-largest turnover on the Hong Kong bourse Monday.
Chen, 58, quit as chairman of Sinopec and president of parent Sinopec Group citing "personal reasons," two years ahead of the official age of retirement for vice-minister-level cadres.
His resignation gave rise to reports of corruption or "serious breaches of discipline" in the mainland media, while some linked the issue to huge refining losses.
Last month, Duowei News, a mainland online news portal, said in an exclusive story about corporate corruption that Chen was under investigation.
Neither Sinopec nor its parent has made any comment since Chen's resignation Friday.
Sinopec announced Monday, in a statement filed with the Hong Kong stock exchange, that an extraordinary general meeting will be held August 10 in Beijing to elect Su Shulin, a former executive of rival PetroChina (0857), as a director.
Vice chairman Zhou Yuan will be acting chairman until a replacement is elected.
Su, 45, was a senior vice president at PetroChina and deputy general manager and member of the party committee of parent CNPC. He was named Friday as general manager of Sinopec Group by the State-owned Assets Supervision and Administration Commission.
Investment bank Goldman Sachs said in a report Monday that the news broke without warning. "We believe the uncertainty over Chen's sudden resignation could have a negative near- term impact on Sinopec's share price." Goldman maintains a "sell" rating on the stock with a target of HK$6.35.
"The change in chairman won't have an adverse impact on Sinopec's value or its development plans," China Merchants Securities analyst Qiu Xiaofeng wrote in a report.
Qiu said Chen's resignation would not break down the teamwork at such a big company. Also, Su's experience in the industry could help Sinopec to strengthen its upstream business, Qiu believes.
An analyst said that while Chen's resignation "will not have any impact on Sinopec's operations," the reasons for his resignation are a cause for concern. However, given the sensitive nature of the issue, details of the investigation may not be disclosed, another analyst said. |
|
|
|
|
|
|
