Chinese stocks listed in the U.S. fell, pulling the benchmark index (SPX) down from a one-week high, on concern growth in the world’s second-largest economy may slow as a lingering European debt crisis reduces exports.
The Bloomberg China-US 55 Index (CH55BN) of the most-traded Chinese equities fell 1.5 percent to 93.69 at the close of trading in New York. Sina Corp. (SINA), which owns the Twitter-like Weibo service in China, and Baidu Inc. (BIDU), the nation’s biggest online search engine, paced declines in Internet shares. NetEase.com Inc. (NTES) retreated 6.6 percent after it was dropped from a focus list at Roth Capital Partners LLC. A 1.1 percent slump in China Mobile Ltd. (CHL) created a 12-cent discount to its Hong Kong-listed shares.
Chinese Premier Wen Jiabao said this week that slowing growth and elevated prices are adding to the difficulties the government faces, and he encouraged export-reliant regions to explore sales to domestic or emerging markets. The country’s November exports rose the least since 2009, making the government more likely to pursue policies to sustain economic expansion as Europe’s debt crisis lingers.
China’s economy “depends on how much money is going to be thrown into the system,” said Khiem Do, the Hong Kong-based head of multi-asset strategy at Baring Asset Management Asia Ltd., in an interview with Bloomberg Television. “We hope that they would ease off a little bit by cutting banks’ reserve ratio, and they might cut the interest rates as well because many other central banks have cut the rates.”
The government will maintain prudent monetary and proactive fiscal policy next year and policies will be fine-tuned as needed in accordance with the changing situation, the ruling Communist Party said after a meeting last week. The Chinese central bank reduced lenders’ reserve requirements on Nov. 30, the first time since 2008.
The Standard & Poor’s 500 Index advanced 0.2 percent to 1,243.72. The Shanghai Composite Index (SHCOMP) slid for a third day, losing 1.1 percent to 2,191.15 yesterday as equities were dragged down by a cash crunch that pushed the seven-day interbank funding rate up the most in a month.
Sina sank 6.6 percent to $52.07, the lowest since October 2010. It has lost 24 percent this year. The company, which also owns China’s third-most visited website, said last week Beijing’s municipal government will force microblog users to verify their identities. Chinese officials have pressured microblog services to strengthen supervision of users after a fatal rail crash in July sparked an outburst of criticism of the government.
Baidu fell 4.6 percent, the most in a month, to $112.97, trimming its gain in 2011 to 17 percent. Baidu, China’s biggest Internet company by market value, was removed from the U.S. government’s list of “notorious markets” that help sustain piracy and counterfeiting of intellectual property, citing “positive action” by the company.
The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., slid 0.8 percent to $34.76. The Chinese yuan strengthened 0.1 percent to 6.3387 per dollar, according to the China Foreign Exchange Trade System.
In Europe, lenders sought more funds from the European Central Bank than economists had predicted, reducing optimism that the debt crisis will be contained. A total of 523 euro-area banks took a record 489 billion euros ($639 billion) from the ECB in three-year loans yesterday, exceeding the median estimate of 293 billion euros among economists surveyed by Bloomberg.
China’s economy grew 9.1 percent in the third quarter from a year earlier, down from 9.5 percent in the second. Consumer prices rose 4.2 percent in November from a year ago, the slowest pace in 14 months.
The Nasdaq Stock Market was blocked from delisting a Chinese maker of wind towers after the company sued in New York state court, claiming the procedures for kicking it out are marred by racism.
CleanTech Innovations Inc., based in Tieling, China, alleged the exchange violated its own rules and the company’s right to due process in “arbitrarily and capriciously” seeking to remove it. New York State Supreme Court Justice Melvin Schweitzer put the delisting on hold and set a hearing next month for Nasdaq to show why the court shouldn’t let the suit proceed with expedited pre-trial evidence gathering.
China Telecom, the smallest of the country’s three mobile- phone carriers, added 2.16 million 3G users in November, 22 percent fewer than in the previous month, it said on its website Dec. 20. That compared with 2.68 million new users at China Mobile Ltd. (941) and 3.38 million for China Unicom (Hong Kong) Ltd.
The American depositary receipts of China Telecom retreated 3.7 percent to a seven-month low of $55.96. Each ADR represents 100 common shares. The ADRs of China Mobile slipped 1.1 percent to $46.85, while China Unicom slid 0.3 percent to $20.83.
The ADRs of Cnooc Ltd. (883), the nation’s largest offshore oil explorer, dropped 2.6 percent to $173.41. CLSA Ltd. said the company may idle two natural gas fields for as long as two months after they were shut this week because of a leak in a subsea pipeline. The outage could lead to gas shortages in the industrial province of Guangdong if supply from liquefied natural gas terminals is unable to make up the shortfall, CLSA analyst Simon Powell said in a research note e-mailed to clients Dec. 20.
Cnooc underperformed its peers PetroChina Co. (PTR) and China Petroleum and Chemical Corp., known as Sinopec, in U.S. trading. PetroChina, the biggest oil producer in the country, may buy the 40 percent of Canada’s MacKay River oil sands project that it doesn’t already own from Athabasca Oil Sands Corp., the Calgary Herald reported yesterday. PetroChina would pay about $664 million to take over MacKay, which may produce 150,000 barrels of oil equivalent a day, the newspaper said.
PetroChina added 0.8 percent to $120.71 while Sinopec climbed 1 percent to $104.87. Crude oil for February delivery increased 1.5 percent to $98.67 a barrel on the New York Mercantile Exchange.
Youku.com Inc. (YOKU) and Tudou Holdings Ltd., China’s two largest operators of online video sites, are accusing each other of intellectual property infringements by running pirated videos.
“Negotiations went futile, while our competitor initiated misleading PR campaign, we have no other choice but to resort to legal action,” Jean Shao, Youku’s spokeswoman said in an email yesterday, saying its rival has started pirating its contents since 2010.
Youku is illegally showing the entertainment program series “Kangxi is Coming,” whose online broadcast rights in China are owned by Tudou, Yu Bin, vice president of finance at Tudou, said in a phone interview Dec. 19.
Tudou’s ADRs fell for an eighth day, slipping 3.8 percent to $10. Youku slumped 3.1 percent to $17.14.
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