Renren Leads ADRs Rebound on Facebook IPO Price: China Overnight
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. added 0.7 percent to 96.10 by 12:48 p.m. in New York, halting a 9 percent slump in the eight days through May 14. Renren, a social networking website, surged the most in a month, while Internet bookstore E-Commerce Dangdang Inc. (DANG) climbed the most in three months.
Facebook increased the price range on its IPO to as much as $38 a share from $35, a regulatory filing yesterday showed, implying a market value of as much as $104.2 billion. That would make Facebook worth more than Citigroup Inc. (C) and McDonald’s Corp. Beijing-based Renren reported yesterday a first-quarter loss of 3 cents a share, below the median forecast for a 4 cents a share by eight analysts surveyed by Bloomberg.
“All the talk on the street about Facebook is driving retail investors in particular to look for stocks that might gain on social media in China,” Echo He, a New York-based analyst who covers Chinese Internet stocks for Maxim Group LLC, said in a phone interview. “Renren’s second-quarter outlook is weak because advertising is weak, but investors are hoping it can do as well as Facebook.”
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., gained 0.6 percent to $34.93 while the Standard & Poor’s 500 Index added 0.4 percent to 1,343.86. The Shanghai Composite Index fell 0.2 percent yesterday to 2,374.84 while the Hang Seng China Enterprises Index of Chinese companies traded in Hong Kong also broke a string of eight consecutive declines, gaining 1 percent to 10,084.59.
German, U.S. Data
Germany’s economy expanded more than forecast in the first quarter, offsetting contractions elsewhere in Europe and helping the region, China’s largest trading partner, avoid a second recession in three years.
U.S. auto sales running at the fastest pace in four years helped boost manufacturing in the New York region in May more than forecast while strengthening the outlook for a U.S. economic recovery.
“Investors do remain very nervous but a better outlook for the U.S. economy is certainly helping to calm matters,” Charlie Awdry, portfolio manager of Henderson Global Investors’ 500 million pound ($801 million) China Opportunities Fund, said in a phone interview from London. “We still think Chinese earnings are going to grow, though at a slow pace.”
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