Chinese stocks traded in the U.S. rose for a second day, led by Internet companies, on prospects the Asian nation will take further measures to spur expansion after import growth fell to a two-year low.
The Bloomberg China-US 55 Index advanced 1.1 percent to a one-month high of 100.81 as trading closed in New York. Perfect World Co. (PWRD) jumped 20 percent after a record slump yesterday, saying anonymous allegations posted on Chinese-language websites were “false.” Sina Corp (SINA). surged the most since October while Focus Media Holding Ltd. (FMCN) jumped 9.7 percent after announcing a plan of recurring dividend payment. China Southern Airlines Co. (ZNH) traded at a 3.7 percent premium over its Hong Kong-listed shares, the biggest in a month.
China’s December imports rose the least in two years, a customs bureau report showed yesterday. The central bank cut the amount of cash lenders must set aside as reserves last month for the first time since 2008 to help bolster the economy.
“We expect the government to cut the reserve ratio in the next couple of quarters as well,” said Kelvin Tay, chief investment strategist at UBS Wealth Management in Singapore in an interview with Bloomberg Television. “We believe inflation has peaked in July 2011, that’s why credit easing could kick in much earlier than expected.” China’s inflation cooled to the slowest pace in 14 months in November.
Perfect World, a Beijing-based online games developer, said in a statement yesterday “malicious” allegations followed “several extortion activities attempting to extort money from the company” and its chief executive officer. The company reported the allegations to local government authorities and is taking legal actions against people involved, it said.
Perfect World Recovers
Perfect World tumbled 27 percent Jan. 9 to a record low of $8.81 after a posting claiming that the company is being investigated by U.S. and Chinese regulators appeared on several Chinese-language websites. Its shares rebounded 20 percent to $10.53 yesterday.
The company’s “firm response has satisfactorily addressed investors’ concerns,” Andy Yeung, a New York-based analyst at Oppenheimer & Co., said in a note yesterday. “We are incrementally more constructive on the name.”
The Shanghai Composite Index (SHCOMP) gained 2.7 percent to 2,285.74 yesterday, completing the biggest three-day gain since October 2010. The Standard & Poor’s 500 Index of U.S. stocks climbed 0.9 percent to 1,292.08.
Sina, the provider of a Twitter-like service and the third- most visited website in China, surged 13 percent to $54.37, the most since October. Analysts at Brean Murray Carret & Co. and Roth Capital Partners LLC reiterated “buy” recommendations yesterday. Brean Murray maintained a 12-month price target of $132 and Roth Capital kept its goal at $110.
Focus Dividend Plan
Focus Media, a digital advertising company based in Shanghai, leaped 9.7 percent to $20.52, the most since November. The company will designate 25 percent of its annual adjusted net income to pay dividends quarterly, starting from 2012, it said in a statement yesterday.
Focus will also reserve up to an additional 30 percent of its annual adjusted net income to increase dividend payments or the size of its share repurchases from this year, it said.
China, the world’s second-largest economy, expanded 9.1 percent in the third quarter from a year earlier, down from 9.5 percent growth in the second quarter, and the slowest pace in two years. December imports rose 11.8 percent from a year before, the least since October 2009.
The American depositary receipts of China Southern, Asia’s biggest carrier by passenger numbers, rose 7.6 percent to $29.57, the highest since Oct. 27. Each ADR represents 50 common shares. The company gained 6 percent to HK$4.43, the equivalent of 57 U.S. cents. The 3.7 percent premium in ADRs was the biggest since Nov. 30.
Global airport passenger traffic increased 2.9 percent in November, data yesterday from the Airports Council International in Geneva showed. Airport traffic in the Asia Pacific region rose 4.8 percent, from 4.4 percent in October.
The ishares FTSE China 25 Index (SPX) Fund (FXI), the biggest Chinese exchange-traded fund in the U.S., rose 2.3 percent yesterday to a one-month high of $36.73. The Chinese yuan was little changed at 6.3150 per dollar, according to the China Foreign Exchange Trade System.
The Shanghai benchmark stock gauge is trading at an estimated price-earnings ratio of 9.4 times. That compares with 14 for Indian stocks, 9.4 for Brazilian shares and 5.6 for Russian equities.
The government is scheduled to report today inflation data for December. Consumer prices may have risen 4 percent from a year ago, the median estimate of 26 economists surveyed by Bloomberg showed. That would compare with a 4.2 percent gain in November.
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