China Mobile Drives Up NY Index as Focus Rises: China Overnight

Chinese stocks listed in New York rose, erasing the benchmark’s losses for the week, after surveys showed bankers expect the government to take further measures to increase loan growth in the Asian nation.

The Bloomberg China-US 55 Index (SPX) also climbed as better-than-forecast jobless claims and consumer confidence in the U.S. boosted stocks. Telecom shares led gains in the gauge, which added 1.4 percent to 94.98 as trading closed in New York. Focus Media Holding Ltd. jumped 5 percent to a one-week high as a survey confirmed the size of its digital advertising network. China Telecom Corp. (CHA) increased the most this month after Pacific Crest Securities Inc. upgraded the company to “outperform.”

More Chinese bankers expect authorities to loosen monetary policy further after cutting the amount of cash lenders must set aside as reserves this month for the first time since 2008, quarterly surveys by the central bank showed. China’s economy expanded at the slowest pace in two years in the third quarter, while inflation cooled to the slowest in 14 months in November.

“Monetary easing that’s going on now” in China will help growth to pick up in the second half of next year, Enzio von Pfeil, chief executive officer of Commercial Economics Asia Ltd., said in an interview with Bloomberg Television. “They are creating an excess supply of money.”

The American depositary receipts of China Mobile, the nation’s biggest wireless network operator, rose 1.2 percent to $47.42. China Unicom (Hong Kong) Ltd., the second largest and the only carrier offering Apple Inc.’s iPhone with a service contract, gained 1.4 percent to a nine-day high of $21.13, trading at a 2-cent premium per share over stock in Hong Kong.

China Mobile

China Telecom Corp., the smallest of the three mobile-phone companies, surged 3.6 percent to $57.98 after the company was upgraded to “outperform” from “sector perform” by analyst Steve Clement at Pacific Crest Securities.

China Mobile added 2.68 million 3G users in November, compared with 3.38 million at China Unicom and 2.16 million for China Telecom, according to the companies’ websites. China Unicom will introduce Apple’s 4S as early as the end of December, China Daily reported Dec. 13, citing Yu Yingtao, the company’s sales and marketing head.

“Given the structural drivers to Unicom’s net additions momentum, we see its strong momentum continuing into next year,” analysts led by Anand Ramachandran at Barclays Capital Inc. said in a Dec. 20 note. They favored China Unicom and China Telecom over China Mobile, according to the report.

The Standard & Poor’s 500 Index advanced 0.8 percent to 1,254.00. The Shanghai Composite Index (SHCOMP) slid for a fourth day, losing 0.2 percent to 2,186.30 yesterday.

Index Valuations

The Shanghai measure is trading at an estimated price-earnings ratio of 10.5 times, a record low, according to weekly data compiled by Bloomberg that began tracking the multiple in 2006. That compared with 13.7 for Indian stocks, 10.2 for Brazilian shares and 4.6 for Russian equities.

The ADRs of Shanghai-based Focus Media leaped 5 percent to $21.03, the most since Dec. 12. A survey by market research company Synovate showed that the number of LCD screens and poster frames Focus claimed to have by Nov. 28 was more than 99.95 percent accurate, Focus said in a statement yesterday.

The report is the second this month from Focus stating survey results confirming its advertising network size after short-selling firm Muddy Waters LLC said last month that the company was overstating it.

The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., rose 1.6 percent to a nine-day high of $35.31. The Chinese yuan was little changed at 6.3390 a dollar, according to the China Foreign Exchange Trade System.

E-Commerce China Dangdang Inc. (DANG), the country’s largest online book retailer, surged 9.6 percent to $4.66, the most in two weeks. The company said Dec. 21 it started a website for digital books, providing approximately 50,000 book titles which can be downloaded on some smartphones and computers.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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