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Stocks

Sinopec soars on acquisition speculation

Stocks jump after Bloomberg reports possible Gulf Keystone acquisition

HONG KONG -- China Petroleum & Chemical (Sinopec), on Wednesday extended its gaining streak for a third session to 5.970 Hong Kong dollars, up HK$0.350, or 6.2%, on the Hong Kong stock exchange on speculation that it may acquire the U.K.'s Gulf Keystone Petroleum.

The share price approached the year-to-date high marked on Oct. 11. On the Shanghai Stock Exchange, the stock reached a new year-to-date high for the first time since Dec.2.

On Tuesday, Bloomberg reported that Sinopec is weighing up a takeover of the British oil and gas exploration and production company, which operates in the Kurdish region of Iraq.

According to the report, Sinopec is currently in talks over the deal with Gulf Keystone.

Although the company has managed to produce oil in the area, the company is now in financial difficulties due to the region's political instability and other factors. Sinopec is believed to have expressed a willingness to reduce the risk of import oil price volatility.

Bloomberg also reported that Sinopec is reviving an initial public offering for its retail arm that could raise up to $10 billion.

Other Chinese oil stocks such as PetroChina and CNOOC also surged on the Hong Kong stock exchange on Wednesday morning.

The increase followed a report on the online edition of Chinese newspaper Beijing Times claiming a massive hike in gasoline prices in China is expected to be announced in the near future. 

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