PARIS, Aug 25 (Reuters) - Shares in debt-ridden oil services group CGG surged for a fourth consecutive day on Friday, with traders and fund managers citing continuing speculation of a bid from China’s Sinopec as the main driver for the rally.
They added there was also an element of hedge funds cancelling out negative bets on CGG’s shares falling in future - known as “short covering” - as contributing to the rally.
CGG shares were up 19.4 percent at 6.1 euros in early session trading, with the stock up 110 percent over the last week.
Speculation of a bid from Sinopec first surfaced at the start of the week. A CGG spokesman said on Friday that the company had no comment to make on the bid rumours.
“We’re still in the same trend, namely talk of interest from Sinopec, but it’s really still just speculation,” said one Paris-based fund manager.
Despite the stock’s rally over the last week, CGG shares remain down by nearly 60 percent since the start of 2017.
CGG, in which the French state holds around 9 percent of the shares, filed for bankruptcy in France and the United States in June as part of a restructuring to ease its debt burden. CGG currently has debt in excess of $3 billion. (Reporting by Sudip Kar-Gupta; Editing by Bate Felix)