Chinese stocks in the U.S. rose for the first time in four trading days amid speculation policy makers may ease lending curbs after the world’s second-largest economy expanded at the slowest pace in 10 quarters.
The Bloomberg China-US 55 Index (CH55BN) advanced 1.1 percent to 100.68 in New York yesterday, the highest level in a week. Software provider AsiaInfo-Linkage Inc. (ASIA) jumped the most since October as Jefferies International Ltd. reiterated a “buy” recommendation on the stock. Aluminum Corp of China, the nation’s biggest maker of the metal, surged to the highest in more than a month as commodities prices rose the most in two weeks. New Oriental Education & Technology Group (EDU) Inc. fell the most in three months on a lower-than-predicted sales outlook.
China’s economy expanded at the slowest pace since June 2009 in the last quarter of 2011, data released yesterday showed, boosting expectations that the government will build on last month’s first cut to bank reserve-requirement ratios in three years by further loosening monetary policy.
“You’ll see an easing of reserve requirements in the near future, that’s been well telegraphed to the market,” Michael Shaoul, the chairman of Marketfield Asset Management in New York, which manages $1.3 billion, said by phone yesterday. “We’ve started a typical down cycle when economic reality gets worse and worse and the central bank reacts to that by adding liquidity.”
China’s gross domestic product rose 8.9 percent in the three months ended Dec. 31, from 9.1 percent in the previous quarter, the statistics bureau said yesterday. Full-year economic growth slowed to 9.2 percent from 10.4 percent in 2010, the data showed.
The People’s Bank of China hasn’t moved the nation’s lending rate since July, when it was boosted to 6.56 percent amid accelerating inflation. Policy makers reduced the amount large banks must set aside as reserves by 50 basis points, or 0.5 percentage point, in December to 21 percent and consumer- price growth slowed to 4.1 percent in December, from as much as 6.5 percent in July.
The Chinese government may roll out monetary easing measures as early as this week, Frederic Neumann, the Hong Kong- based co-head of Asian economic research at HSBC Holdings Plc, said in an interview with Bloomberg Television yesterday. “In the short term, the Chinese will do everything to maintain growth at 8 percent to 9 percent.”
Macau casino operator Melco Crown Entertainment Ltd. (MPEL) rose 1.2 percent to a two-month high of $10.63 in New York, a 0.8 percent premium over its shares traded in Hong Kong and the biggest gap in two days. Fourth-quarter gaming revenue in Macau, the only place in China where public gambling is allowed, increased 4.7 percent from the previous three months, the Gaming Inspection and Coordination Bureau of the city said yesterday.
Ku6 Media Co., a Internet television service provider based in Beijing, surged 139 percent to a six-month high of $3.30, the biggest one-day advance since the shares started trading in February 2005. The company forged a partnership with YouTube LLC that will offer its video services on a new channel to viewers outside China, Ku6 Media said in a PR Newswire statement issued yesterday.
The Shanghai Composite Index (SHCOMP) surged 4.2 percent yesterday, the most since October 2009, to 2,298.38 after the release of the GDP figures and a China Securities Journal report said that the National Social Security Fund had won approval to invest 100 billion yuan ($15.8 billion) in stocks and bonds. The Standard & Poor’s 500 Index (SPX) of U.S. stocks was up 0.4 percent to 1,293.67 by the close of trading.
AsiaInfo-Linkage, which provides software to telecommunications companies, climbed 10 percent to $8.77, the biggest jump since Oct. 4. Anita Chen, an analyst at Jefferies in Hong Kong, maintained a “buy” rating on the company yesterday, while cutting the 12-month price target to $10 from $16.
The Beijing-based company’s fourth-quarter sales probably rose 18 percent from a year earlier, according to the median estimate of eight analysts surveyed by Bloomberg. AsiaInfo- Linkage may report results for the last three months of 2011 on Jan. 30.
American depositary receipts of Aluminum Corp, known as Chalco (ACH), leaped 5.2 percent to $12.32, the highest level since Dec. 1. Each ADR represents 25 common shares. The ADRs traded 0.9 percent lower than the company’s Hong Kong-listed shares, compared with a 1.1 percent discount in the previous trading session on Jan. 13.
U.S. stock markets were closed on Jan. 16 for the Martin Luther King Jr. holiday.
Yingli Green Gains
Aluminum for three-month delivery rose 3 percent to $2,228 a ton on the London Metal Exchange, the highest level since Oct. 28.
Solar stocks also advanced in New York trading, led by Yingli Green Energy Holding Co. (YGE), which jumped 8.7 percent to a four-month high of $5.11. The Baoding, China-based maker of solar modules has climbed 35 percent this year in New York.
New Oriental, China’s largest private education service provider, tumbled 11 percent to $22.36, the biggest one-day drop since October. Revenue for the quarter ended in February 2012 will be between $168.3 million to $176.2 million, the company said in a statement yesterday. That compared with the $176.9 million average estimate of nine analysts in a Bloomberg survey.
The sales forecast reflected a “negative impact” on New Oriental’s business from the early timing of the Chinese New Year holiday starting on Jan. 23, according to the statement.
Revenue for the three months through November rose 38 percent from a year earlier to $132 million, said the Beijing- based New Oriental, which uses its own earnings calendar. Net income during the period was up by 80.5 percent to $3.3 million, or 2 cents per share, the company said.
The iShares FTSE China 25 Index Fund (FXI), the biggest Chinese exchange-traded fund in the U.S., advanced 2.4 percent to a two- month high of $37.62. The yuan was little changed at 6.3150 per dollar, according to the China Foreign Exchange Trade System.
China’s Commerce Ministry may release December foreign direct investment data as soon as today. Investment from overseas may have exceeded $110 billion in 2011 reaching a record high, the ministry said on Dec. 30. The outlook for 2012 is “not optimistic,” the ministry said.
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