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China Eastern Airlines soars in Shanghai on merger speculation

Analysis

Shanghai (XFN-ASIA) - China Eastern Airlines Corp Ltd (SHA

600115; HK 0670; NYSE CEA) was sharply higher in Shanghai on speculation that

the company could be acquired by Air China Ltd (SHA 601111; HK 753).

Local media reported that Air China probably will propose a new plan to merge with Eastern ahead of the Air China shareholder meeting scheduled for Jan 8, 2008.

At 10.55 am, China Eastern Airlines was up 1.32 yuan or 9.05 pct at 15.90.

Air China added 1.33 yuan or 6 pct to reach 23.29

Airline stocks have outperformed the market recently due to continued yuan appreciation and retreating oil prices.

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