Apple Maps Fiasco Sinks AutoNavi; Ctrip Gains: Overnight

Chinese equities rose in New York on prospects shrinking manufacturing will spur the government to take further steps to bolster the economy.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. climbed 0.2 percent to 92.3 in New York yesterday. Qihoo 360 Technology Co. Ltd. rallied the most since August after Jefferies Hong Kong Ltd. reiterated a forecast for the shares to climb 60 percent in the next year. International Ltd. (CTRP) jumped the most in two weeks as Raymond James & Associates upgraded the stock. AutoNavi Holdings Ltd. (AMAP) sank to a four-month low and E-Commerce China Dangdang Inc. (DANG) dropped to the weakest level this year.

An index of manufacturing in China, the world’s largest exporter, rose to 49.8 in September, data released on Oct. 1 showed, the second month the gauge has stayed below the 50 level that is the dividing line between expansion and contraction. China’s government is striving to ignite growth in an economy expanding at the slowest pace since 2009 as it prepares for a once-in-a-decade leadership transition at the Communist Party congress on Nov. 8.

“The market is still expecting more stimulus from the government, more in fiscal policy,” Michael Ding, lead portfolio manager of the China Regional Fund at U.S. Global Investors, said by phone from San Antonio yesterday. “The party congress date also reduces political risk for investing in China.”

China ETF Slips

The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., was little changed at $34.92 after rising 1 percent on Oct. 1. The Standard & Poor’s 500 Index (SPX) closed little changed at 1,445.75.

Qihoo, which started a new search engine in August, surged 4.9 percent to $22.87, the biggest jump since Aug. 22.

Jefferies analyst Cynthia Meng maintained a price target of $35 for Qihoo in an Oct. 1 note, 60 percent higher than its closing level that day.

Beijing-based Qihoo has the potential “to be a disruptive force in search,” Meng wrote in the report. It dominates 10 percent of China’s online search market and will probably maintain that share in 2013, according to Meng.

Ctrip, China’s biggest online travel company, advanced 4.2 percent to $17.45, the largest one-day gain since Sept. 19.

Analyst Aaron Kessler at San Francisco-based Raymond James raised Ctrip to a strong buy yesterday and said the stock will advance as much as 55 percent on speculation competition with competitor Elong Inc. (LONG) will ease this quarter. Kessler expects Shanghai-based Ctrip to buy back as much as $400 million of outstanding shares under an ongoing share purchase plan.

E-Commerce, China’s largest online book retailer, plunged 3.4 percent to $4.51, the lowest level this year.

Apple Link

AutoNavi, a Chinese digital map provider, slid 1.3 percent to $10.76, the lowest level since June 4.

Apple Inc.’s shares have fallen 1.6 percent since Sept. 28, when Chief Executive Officer Tim Cook said the Cupertino, California-based company was “extremely sorry” for flaws in its map application such as misrouted directions and inaccurately located landmarks. Beijing-based AutoNavi, which traded at its cheapest level since June yesterday, was selected by Apple to offer map services for users of the iOS 6 operating system in China, two people with knowledge of the matter said in July.

Initial problems with Chinese maps on iOS6 weren’t caused by AutoNavi, Yongqi Yang, an executive vice president at the company, said last week, according to a report by Tencent Holdings Ltd.’s news service. AutoNavi’s partnership with Apple started as early as February 2010, Yang said, according to the Tencent report.

Hong Kong Resumes

An e-mail and two phone messages to Apple spokeswoman Trudy Muller weren’t returned yesterday. A phone message and e-mail sent to Jessica Barist Cohen of Ogilvy Financial in New York, which represents AutoNavi, also weren’t immediately returned. Serena Shi, a communications manager at AutoNavi, couldn’t be reached by phone after normal business hours yesterday in Beijing.

The Hong Kong stock market resumes trading today after closing over the past two days for a holiday. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies advanced 0.6 percent to 9,831.62 on Sept. 28. Markets in mainland China are closed this week for a week-long holiday.

To contact the reporters on this story: Belinda Cao in New York at; Leon Lazaroff in New York at

To contact the editor responsible for this story: Emma O’Brien at

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