Chinese stocks traded in the U.S. gained for the first day in three, bolstered by an overseas acquisition by Cnooc Ltd. (CEO) and prospects for faster growth in the country’s solar industry.
The Bloomberg China-US 55 Index (CH55BN) rallied 3.3 percent to 97.3 at the close of trading in New York, the biggest daily advance in three weeks. Cnooc jumped 6.6 percent after saying it completed a $2.1 billion purchase of OPTI Canada Inc. Solar stocks advanced, led by LDK Solar Co. (LDK) and Trina Solar Ltd. (TSL) and spurred by reports that an industry group expects sales in China’s solar thermal sector to grow 28 percent this year. Shanda Games Inc. (GAME) jumped 11 percent, the biggest increase among the most-traded U.S.-listed Chinese shares, after saying it will pay a cash dividend.
Chinese companies have bought a total of almost $30 billion of Canadian assets in the past five years to meet energy demand in the world’s fastest-growing major economy and gain access to drilling methods to help unlock Asian resources. Prior to the Cnooc deal, China Petroleum and Chemical Corp., Asia’s biggest refiner also known as Sinopec, agreed in October to buy oil and gas producer Daylight Energy Ltd. of Calgary for C$2.2 billion ($2.1 billion).
“Crude oil and product demand remains strong,” Thomas C. Hilboldt, a Hong Kong-based analyst at Samsung Securities Co. wrote in a report yesterday, maintaining “buy” ratings on Cnooc and Sinopec and “hold” on PetroChina Co. (PTR), the largest oil producer in the country.
U.S. stocks snapped a seven-day decline amid a global equities rally after Thanksgiving retail sales climbed to a record and the Welt am Sonntag newspaper said German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning a stability pact to help solve Europe’s debt crisis. The Standard & Poor’s 500 Index rose 2.9 percent to 1,192.55.
Oil futures for January delivery rose 1.5 percent yesterday to $98.21 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 17. Prices have gained 7.5 percent this year.
Cnooc’s American depositary receipts, representing 100 common shares each, rose the most since Nov. 2 to $183.30. They are trading at a premium over Cnooc’s Hong Kong-listed shares, which gained 2.7 percent to HK$13.86, the equivalent of $1.78.
After the purchase, the Calgary-based OPTI will redeem a total $825 million of debt securities due in 2012 and 2013 on Dec. 28, Cnooc said in a statement yesterday. OPTI will apply to delist the outstanding shares with the TSX Venture Exchange and the expected delisting date is Dec. 1, the statement said.
Cash-rich Asian oil and gas companies, including PetroChina, may spend $150 billion on global acquisitions in the next five years, Sanford C. Bernstein & Co. said in a report in September. Cnooc is aiming to step up overseas purchases and accelerate domestic production, it said Aug. 24, after cutting this year’s output target to as much as 341 million barrels from a previous goal of 365 million barrels.
Suntech, LDK Surge
LDK Solar, China’s second-largest maker of solar wafers, surged 9.6 percent to $3.42, the most in a month. Trina, the country’s fifth-largest solar panel supplier, gained 9.3 percent, also the biggest daily gain in a month, to $7.15. Suntech Power Holdings Co. (STP), the world’s largest maker of solar panels, advanced 5.2 percent to $2.41.
Sales in China’s solar thermal industry for 2011 will rise 28 percent to 94.2 billion yuan ($14.8 billion), the official Xinhua News Agency reported yesterday, citing Luo Zhentao, executive director of the China Solar Thermal Industry Federation at a forum. Solar power will contribute 10 percent of China’s renewable energies in the five-year period starting 2011, Luo said, according to Xinhua.
The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., added 3.8 percent to $34.61, the most since Nov. 2. The Chinese yuan weakened 0.1 percent to 6.3841 a dollar yesterday, cutting its gains this year to 3.5 percent, according to the China Foreign Exchange Trade System.
China, the world’s second-largest economy, grew 9.1 percent in the third quarter from a year earlier. Consumer price gains slowed to 5.5 percent in October from a three-year high of 6.5 percent in July.
Shanda, the third-biggest online games operator in China, surged 11 percent to $4.43, the most since Oct. 5. The Shanghai- based company said yesterday it will pay a “special one-time” cash dividend of 51 cents per share, or $1.02 per ADR, to shareholders of record by Dec. 20. The payment will be made around Jan. 20, 2012, it said in a statement.
Baidu Inc. (BIDU), which owns China’s most popular online search engine, advanced 5.8 percent, the most in a month, to $126.81. Youku.com Inc. (YOKU), China’s biggest online-video site, rose 7.2 percent to a one-week high of $16.86. Its ADRs slumped to a two- month low of $14.55 on Nov. 21 after reporting a larger-than- forecast loss in the third quarter. Its peer Tudou Holdings Ltd. rose 3.9 percent to $12, rebounding from a record low of $11.38 reached on Nov. 23.
“We see opportunities arising from share weakness,” C. Ming Zhao, an analyst at Susquehanna International Group LLP, wrote in a research note yesterday. “We continue to like Baidu as a sector leader trading at the bottom range of its historical price-to-earnings ratio band.”
Baidu’s shares are trading at 30.8 times estimated earnings, compared with an average of 85.8 in the past five years.
The Shanghai Composite Index (SPX) added 0.1 percent to 2,383.03, after reaching a one-month low in the previous trading session, on speculation that China may ease some fiscal policies or credit controls to support economic growth. The measure is trading at 11.3 times estimated earnings, compared with 14.1 for Indian stocks, 10.1 for Brazilian shares and 5.1 for Russian equities.
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