Chinese stocks climbed in New York, paring the benchmark index’s first monthly drop since July, on prospects expansion in manufacturing will add to signs of a recovery in the world’s second-largest economy.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. gained 0.6 percent to 92.81, trimming its November loss to 1.2 percent. Electricity producer Huaneng Power International Inc. (HNP) surged to a four-year high on falling coal prices, while solar company Yingli Green Energy Holding Co. (YGE) capped a 40 percent weekly advance, the most since 2009. Baidu Inc. (BIDU) dropped as smaller rival Qihoo 360 Technology Co. Ltd. (QIHU) said its market share increased.
China’s purchasing managers’ index rose to 50.8 in October, increasing for a second month, according to the median forecast of 28 economists ahead of data due out today. The data may be another signal China is emerging from its seven-quarter slowdown, after factory production and retail sales picked up last month and inflation slowed. Confidence in China’s economy is at the highest level in more than a year on optimism the nation’s new incoming leaders will provide a boost to the financial climate, according to a Bloomberg investor poll.
“The November PMI should continue to strengthen, helping boost sentiment toward Chinese stocks,” Michael Ding, lead manager of the China Region Fund (USCOX) at U.S. Global Investors Inc., which oversees $2.2 billion, said by phone from San Antonio, Texas yesterday. “People are trying to interpret the latest public activities of China’s new leadership, which seem to indicate they have pro-growth policies.”
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., advanced 0.8 percent to $37.15, leaving the ETF up 1 percent for November. The Standard & Poor’s 500 Index slipped was little changed at 1,416.18 for a weekly advance of 0.5 percent, as lawmakers negotiate over the U.S. federal budget.
Huaneng Power climbed 3.3 percent to $34.09, highest closing price since September 2008. The benchmark Chinese price index for coal used in power stations slid 0.2 percent from a week earlier, according to the Qinhuangdao Seaborne Coal Market website.
Yingli Green Energy surged 4.7 percent to $1.8, its highest price in more than two months. Trading volumes were almost three times the daily average over the past three months. Chief Executive Officer Miao Liansheng said Nov. 28 he expects the company will be the world’s biggest panel supplier this year.
Baidu, owner of China’s most popular search engine, dropped 2.7 percent to $96.31 as smaller rival Qihoo said its share of the Chinese Internet market had grown to 10 percent, according to a report in the Wall Street Journal. Baidu’s decline added to a monthly drop of 9.8 percent, the steepest since May.
Youku Tudou Inc. (YOKU), China’s biggest online video company, gained 1.1 percent to $17.06 as it reported third-quarter revenue that beat analysts’ estimates. Sales almost doubled to $79.9 million, beating the $73 million projected by six analysts surveyed by Bloomberg.
Youku, which acquired Tudou Holdings Ltd. in March, said it achieved operating profitability for the first time in its history and announced it will begin to monetize its mobile traffic next year.
“This indicates that if it can make profit on a smaller scale, the combined company will also become profitable as the merger’s benefits take effect gradually,” Tian X. Hou, the founder of T.H. Capital LLC, said in by phone from Beijing. “The merged company can reach more audience and set higher prices for advertisers.”
The Hang Seng China Enterprises Index (HSCEI) rallied 1.3 percent yesterday to gain 0.4 percent in the month, while the Shanghai Composite Index (SHCOMP) climbed for the first time in five days, adding 0.9 percent. The gauge of domestic Chinese stocks lost 4.3 percent in November.
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