China Cosco Holdings has announced that the state-owned company expects to report a "large net loss for 2012".
The announcement marks the second year of losses in a row and an imminent downgrading of the status of its yuan-denominated A shares by the Shanghai Stock Exchange, reported The Wall Street Journal.
Cosco said in a statement that the expected loss would be the result of a weak container shipping market and high fuel costs.
In 2011, Cosco reported a net a loss of USD1.69 billion. According to the WSJ, analysts have forecast a loss of USD1.04 billion to USD1.28 billion for 2012.
Under China's listing rules, the two domestic stock exchanges are entitled to put a company's stock in the "special treatment" category if the company posts losses for two consecutive years, limiting the daily trading movement of its shares to five percent from the standard 10 per cent.
Three years of losses could result in a suspension of the listing.
Source: Cargonews Asia
Image Source: masterod
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