Hong Kong listed China Cosco Holdings Co. has sold CNY15 billion (US$1.97 billion) of stock in Shanghai to finance the purchase of new ships as world trade with China booms.

Investors bought 1.78 billion shares at CNY8.48 each, the top end of the price range, according to statement made to the Shanghai stock exchange. A report by Bloomberg said the share sale was the fourth biggest in China this year.

The sale comes amid forecasts that the volume of traffic handled by Chinese ports may rise by 80 per cent by the end of the decade.

"The company needs to fund the expansion of its fleet and raising money in China is very easy right now," said Ji Lijun, an analyst at Shanghai Securities Co. "The move is also in line with the government's directive to list more state-owned companies on mainland stock markets."

Mr Ji told Bloomberg that China Cosco intends to double its fleet capacity to 800,000 boxes by 2010. According to a share sale document, China Cosco aims to spend CNY6 billion of the sale proceeds on 12 new vessels from two Chinese shipyards. Four of the ships will each have a capacity of 10,000 boxes, and they are scheduled for delivery between 2008 and 2009. The other eight ships, each able to carry 5,100 containers, will be delivered by 2011, the report said.

China Cosco had a total of 26 containerships on order by the end of 2006, with a combined capacity of 166,320 TEU, the company said in March.

China Cosco is also expected to use CNY1.68 billion of the sale proceeds to acquire a 51 per cent equity interest in Cosco Logistics from its state-owned parent Cosco Group. A further CNY401 million will be spent on projects being developed by its logistics unit.

In 2006, throughput at Chinese ports rose to 93.6 million TEU, more than triple the amount handled in 2001 at 27.5 million TEU, according to China's Ministry of Communications. The ministry is forecasting the total volume of containers may increase to 170 million TEU by 2010, Bloomberg added.