(Corrects industrial output growth figures in sixth paragraph.)
Chinese U.S.-traded stocks climbed, led by Tudou Holdings Ltd. (TUDO), as speculation slowing inflation will spur policy makers to take further steps to bolster growth lured investors to the lowest share prices in a month.
Online video sharing website Tudou rose to the highest level in March and was the biggest gainer on the Bloomberg China-US 55 index of the most-traded Chinese companies in the U.S. The index added 2.1 percent to 103.36 yesterday in New York, rebounding for a second day after posting the steepest drop in three months on March 6. Yingli Green Energy Holding Co. (YGE) led most solar stocks higher on prospects a delay in Germany’s plan to cut aid for the panel industry will avert a slump in solar power installations.
China may report today that consumer-price growth slowed to the least in 19 months and that industrial production dropped near a two-year low, according to economist surveys conducted by Bloomberg. The nation this week reduced its growth target for the year to the lowest level since 2004 as Europe’s debt crisis boosts the risk of a global slowdown and cuts demand for products from the world’s largest exporter.
“The government will roll out more favorable measures to help the economy later this year,” said Junheng Li, founder of JL Warren Capital LLC in New York, which invests in Chinese stocks. Share prices are recovering after undergoing a “correction process” that was “overdone,” Li said by phone.
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., climbed 2.4 percent to $38.81 in the second day of gains. The Standard & Poor’s 500 Index (SPX) rose 1 percent to 1,365.91, after a majority of investors indicated that they will participate in Greece’s debt swap.
The National Statistics Bureau may report today that consumer prices rose 3.4 percent in February from a year earlier, from 4.5 percent in January, according to the median estimate of 35 economists in a Bloomberg survey. That would be the slowest pace since July 2010. Factory output growth may have eased to 12.5 percent, from 12.8 percent in December. The government hasn’t given data for January in part because the weeklong Chinese New Year holiday distorts data in the first two months.
Policy makers in China are already loosening monetary policy to ease access to credit for smaller businesses, cutting the amount of cash large banks need to keep in reserve for the second time since December last month. Benchmark rates have been on hold since July.
Shanghai-based Tudou, China’s second-largest online video website, climbed for a second day, jumping 11 percent to $13.68, the biggest one-day gain since Feb. 3. Chief Executive Officer Gary Wang said in a March 6 interview that the company is narrowing the gap with industry leader Youku Inc. (YOKU) after adding content and expanding ties with microblogs.
“Competition is intense among China’s online video websites,” Echo He, a senior analyst covering Chinese Internet stocks at Maxim Group LLC in New York, said yesterday by phone.
Tudou reported a net loss for the fourth quarter on March 1 after posting a profit in the previous three months.
American depositary receipts of China Life Insurance Co. (LFC), the nation’s biggest insurer, gained 2 percent to $41.24, the biggest one-day advance in two weeks. David Chung, an analyst at Nomura International Hong Kong Ltd. reiterated a recommendation to “buy” the company’s stock while Olive Xia at Core Pacific- Yamaichi International Ltd. maintained a “hold” rating yesterday.
ADRs of Beijing-based China Life, each representing 15 common shares, traded 1.1 percent above its stock in Hong Kong, the highest premium in five days. The shares were up 1.4 percent in Hong Kong yesterday to HK$21.10, the equivalent of $2.72 per share, while those in Shanghai added 1.4 percent to 17.74 yuan, or $2.81 per share.
The Shanghai Composite Index (SHCOMP) increased for the first time in four days, rising 1.1 percent to 2,420.28 yesterday.
Yingli Green, a solar-panel marker based in Baoding in China’s northern Hebei province, advanced 3.3 percent to $3.77, the biggest daily gain since Feb. 17. LDK Solar Co. (LDK), based in China’s Jiangxi province, rose 3.3 percent to $5, snapping a seven-day slump. Trina Solar Ltd. (TSL), China’s fifth-largest manufacturer of solar modules, added 0.6 percent to $6.99, the first increase in five days.
Policy makers in Germany, the world’s biggest solar-power market, have agreed to postpone subsidy cuts for rooftop units to April 1, from a previous deadline of March 9, and give developers of ground-mounted power plants until June 30 to finish their projects, lawmakers Michael Kauch and Georg Nuesslein said on March 7.
The delay will result in a “strong surge in installations” in the first half, said Martin Simonek, a Bloomberg New Energy Finance analyst.
Suntech Power Holdings Co. (STP), the world’s biggest solar- module maker, slipped 2 percent to $2.87. The company, based in China’s Jiangsu province, reported a third consecutive quarterly loss yesterday, saying greater competition and government subsidy cuts will lead to a decline in its shipments in the first quarter.
China may install as much as five gigawatts of solar panels this year, Suntech’s Chief Executive Officer Zhengrong Shi said yesterday on a conference call with analysts. China plans to develop three gigawatts of solar capacity this year, double its existing capacity, the National Energy Administration said on its website on Jan. 11.
The Hang Seng China Enterprises Index (HSCEI) for Chinese companies traded in Hong Kong added 1.7 percent to 11,168.50, ending a three-day decline. Options on the gauge cost the most since the collapse of Lehman Brothers Holdings Inc. in 2008 when compared with contracts on U.S. stocks. The ratio shows investors are increasingly bearish on the index of Hong Kong-traded China shares after it surged as much as 46 percent since October.
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