Chinese stocks traded in New York climbed the most in a month as European policy makers agreed on steps to safeguard the region’s currency, fueling optimism for exporters in Asia’s biggest economy.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. added 1.8 percent to 87.83 yesterday, the most since Aug. 6. Ambow Education Holding Ltd. (AMBO) surged 14 percent as trading in shares of the tutoring service provider resumed. Yingli Green Energy Holdings Co. rallied after saying it will cooperate with the European Commission’s anti-dumping probe into Chinese solar producers, and Spreadtrum Communications Inc. (SPRD) led gains in technology companies.
European Central Bank President Mario Draghi said yesterday policy makers agreed to an unlimited bond-purchase program aimed at controlling regional interest rates and strengthening the currency of China’s largest trading partner. Europe’s three-year sovereign debt crisis has crimped Chinese exports and weakened industrial output.
“This exercise by the Europeans should allow a lot of laggard markets, particularly the BRICs, to stage a medium-term recovery,” Christopher Palmer, who helps manage $2.5 billion of assets as the director of global emerging markets for Henderson Global Investors Ltd., said by phone yesterday from London. “We know growth has slowed in China but this will help bolster their manufacturers and exporters that have been hurt by Europe’s problems.”
China ETF Jumps
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., gained 1.7 percent to $32.73, the steepest rally in a month. The Standard & Poor’s 500 Index (SPX) surged 2 percent to 1,432.11, the highest level since January 2008. Data showed yesterday service industries in the U.S. expanded in August at a faster pace than forecast and claims for unemployment benefits fell to the lowest level in a month.
China’s top planning agency approved plans to build 2,018 kilometers (1,254 miles) of roads, its second major construction project announced this week, as the government boosts spending on infrastructure to help spur economic growth.
Beijing-based Ambow rebounded 14 percent to $2.59 as trading resumed after a record 27 percent slump on Sept. 5 triggered a suspension in its stock transactions.
All one-on-one tutoring centers operated by Jinghan Yingcai Education and Technology Co., a unit of Ambow, are legally registered with local industrial registration agencies and tax bureaus, and the company is not aware of any pending regulatory reviews, Beijing-based Ambow said yesterday in a PRNewswire statement. The company doesn’t expect any restatement of previous financial results, it said.
Ambow tumbled on Sept. 5 after the company said in an online statement it had started an internal investigation following China’s state television report that its unit exaggerated training results and that the schools’ registrations were incomplete.
“We are satisfied by the company’s explanation that is hasn’t violated any regulations, but remain concerned that attention from official state media could signal a new push toward tighter regulation and possibly even price controls,” Trace Urdan, an analyst at Wells Fargo & Co., wrote in a note yesterday. He maintained an outperform rating on the stock.
Yingli, based in Baoding of China’s northern Hebei province, surged 7.1 percent to $1.67, snapping a two-day slump.
The company will cooperate with the European Commission’s anti-dumping investigation to “prove that the conditions for the imposition of punitive tariffs are not fulfilled,” Yingli said in a statement Sept. 5.
The European Union yesterday opened a probe into whether Chinese manufacturers of solar panels sell them in the 27-nation bloc below cost, a practice known as dumping. The commission has nine months to decide whether to impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies for five years.
Suntech Power Holdings Co. (STP), the world’s biggest panel maker, declined 4.9 percent to 78 cents in New York, extending its loss into a fifth day. LDK Solar Co. retreated 3.8 percent to $1.28, and Trina Solar Co. fell 3.8 percent to $4.03, the lowest level since March 2009.
Spreadtrum, a Shanghai-based mobile chipmaker, jumped 6.5 percent to $20.59, the highest level this year. Hollysys Automation Technologies Ltd. (HOLI), a control systems manufacturer based in Beijing, advanced 5.9 percent to a four-month high of $10.01. Semiconductor Manufacturing International Corp. (SMI), a circuit-chip maker, soared 5.1 percent, the most in four weeks, to $1.84.
The Shanghai Composite Index (SHCOMP) rose 0.7 percent, the most in a week, to 2,051.92 yesterday. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies added 0.5 percent to 9,069.39 in the first increase in three days.
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