E-House Tops Biggest Loss in Two Months: China Overnight

Chinese stocks traded in New York posted their first weekly decline in September and E-House China Holdings Ltd. (EJ) slumped on concern a slowdown in the world’s second-largest economy will extend into next year.

The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. added 0.7 percent to 91.88 at the close of trading yesterday, paring its loss this week to 2.2 percent. Internet real estate agent service provider E-House sank 17 percent this week as SouFun Holdings Ltd. (SFUN), China’s largest property information website, posted its biggest weekly retreat in a month. China Telecom Corp. (CHA) and China Unicom (Hong Kong) Ltd. (CHU) declined more than 5 percent for the week after growth in mobile-service users slowed.

The economic slump may persist into next year amid a lack of funding for approved infrastructure projects, central bank adviser Song Guoqing said yesterday. His comment echoed a forecast by Yuan Gangming, an economist at the Chinese Academy of Social Sciences, who said Sept. 19 that expansion may slow for a ninth quarter to below 7 percent in the first three months of 2013.

“We’re still underweighting the market, and I suspect it will tread water for a little while,” John-Paul Smith, Deutsche Bank AG’s emerging-market strategist, said by phone from London yesterday. “The underlying trend in the economy still looks to be fairly negative.”

The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., gained 0.7 percent to $34.75 yesterday, trimming its weekly slump to 1.3 percent. The Standard & Poor’s 500 Index (SPX) was little changed at 1,460.15 as Apple Inc. (AAPL) started selling the iPhone 5 and a report said European officials will unveil a bailout plan for Spain.

Economic Growth

China will grow 7.3 percent to 7.4 percent in the fourth quarter and 7 percent to 7.5 percent in the first half of next year, Song, a Peking University professor, said in an interview in Beijing. He reiterated a July forecast of 7.4 percent for third-quarter growth.

“There is no hard evidence now to say that there will be a rebound soon,” Song said.

China’s Shanghai Composite Index (SHCOMP) slid 4.6 percent this week, the most since the week ended Oct. 21, 2011, after escalating tensions with Japan threatened trade and a preliminary reading of a manufacturing index by HSBC Holdings Plc and Markit Economics signaled output may shrink for an 11th month in September.

E-House, a provider of property agency services, fell to $4.67 after its biggest weekly decline since May.

Youku Tudou Inc. (YOKU) , a video website that completed its merger with Tudou Holdings Inc. on Aug. 23, tumbled 11 percent to $18.57 in a week when The People’s Bank of China said it aims to emphasize price stability, raising concern it won’t make an additional cut in interest rates following those made in June and July.

Federal Reserve

The U.S. Federal Reserve’s third round of monetary easing reduces the options for China’s policy makers as it may add to inflationary pressure on the world’s second-largest economy, Industrial Securities Co. said in a Sept. 17 report.

Suntech Power Holdings Co. (STP), the world’s largest solar-panel maker, gained 5.9 percent to $1.08 yesterday as the New York Stock Exchange warned the Wuxi, China-based company that it may be delisted from the market. Trading volume was twice the stock’s three-month daily average, according to data compiled by Bloomberg. The NYSE said the average closing price of Suntech’s ADRs was below $1 for 30 consecutive days as of Sept. 10, triggering a delisting warning.

China Eastern Airlines Co. (CEA), the nation’s second-largest carrier by passenger numbers, declined 2.2 percent yesterday to $15.35 as Citigroup analyst Vivian Tao said in an investor note that cancellations may rise during Golden Week, the national holiday that begins in early October, after Chinese tourists broke off as much as 40 percent of reservations to Japan.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net; Leon Lazaroff in New York at llazaroff@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

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