HONG KONG -- China Railway Group stock climbed Thursday after a three-day swoon, driven by news that the company will lead a Hungarian railway project.
The railway construction giant said on Wednesday night that the governments of China and Hungary agreed to collaborate on construction and financing of the Hungarian section of the Hungary-Serbia railway.
China Railway's shares rose 2.85% at one point Thursday, reaching an intraday high of 6.85 Hong Kong dollars (90 cents) before closing at HK$6.67.
A wholly owned subsidiary of China Railway and a unit of state-owned China Railway Corp. will establish a joint venture with Hungary's national railway company. The Chinese side will hold a combined stake of 85%.
The agreement covers 160km of the line's total 350km connecting the Hungarian capital of Budapest with Serbian counterpart Belgrade. Investment is estimated at around 470 billion Hungarian forint ($1.59 billion).
Construction will start this year and is slated for completion in two years, Chinese Premier Li Keqiang said Tuesday at a summit between China and 16 Central and Eastern European countries held in Suzhou.