Nine listed subsidiaries of construction materials giants suspend trading

Nine listed subsidiaries of China’s two construction materials giants suspended trading today, an indication the two state-owned groups are accelerating merger.

Five subsidiaries of China National Materials Group Corp (SINOMA) and two subsidiaries of China National Building Material Group Co halted trading on the mainland stock market. They will resume trading after the two groups “unveil some important issues.” The other two subsidiaries of the two groups on the Hong Kong stock market said they were waiting for details on the merger.

Although the companies didn’t unveil reasons for the trading suspension, China Securities Journal, quoting "some insiders" said they might be settling problems on integrating shareholders at the Hong Kong-listed subsidiaries.

Song Zhiping, chairman of CNBM, said in February the companies have started “deep integration” among their 15 listed subsidiaries.

CNBM is the world’s major non-metal materials manufacturer, with total assets of over 430 billion yuan (US$66 billion) last year. SINOMA is also a leader in the non-metal materials sector.

A cement giant might be established if the two companies merge their subsidiaries as planned. Their combined cement production capacity totals around 385 million tons a year, or 22 percent of the nation’s total.

The merger is an example of China’s state-owned enterprise reform, which aims to enhance domestic companies’ competitiveness by enhancing  industrial concentration.