Solars Lead Best Rally in a Week on Investments: China Overnight

Chinese solar companies rose the most in seven days in New York on prospects the nation’s urbanization plan will bolster new energy demand in 2013.

The Bloomberg China-US Equity Index of the most-traded Chinese shares in New York surged 1.3 percent to 96.92 yesterday, extending gains this year to 7.6 percent. Suntech Power Holdings Co., the world’s biggest solar-panel maker, jumped to the highest in five months and Yingli Green Energy Holding Co. (YGE) rallied the most in two weeks after saying its product ranked second-best in a test of products by 11 global manufacturers. Baidu Inc. (BIDU) climbed the most in three months as it starts new voice applications and Pactera Technology International Ltd. climbed to a six-week high.

China’s urbanization, which Vice Premier Li Keqiang promoted this month as a driver for economic growth, is expected to spur 40 trillion yuan ($6.4 trillion) of investment by 2020, the Southern Metropolis Daily reported on Dec. 25, citing a draft plan by the nation’s top planning agency. The government confirmed this month a second round of subsidies to more than 100 developers of solar projects as well as feed-in tariffs to support the industry.

“What these programs do in China is creating domestic demand,” Dave Smith, the portfolio manager of the Gabelli Green Fund, said by phone from Purchase, New York yesterday. “It’s positive for stock prices in the short term because they give a sense of confidence that these companies will be generating higher volumes.”

ETF Advances

The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., climbed 0.8 percent $39.47 yesterday. The Standard & Poor’s 500 Index dropped 0.5 percent to 1,419.83 as U.S. President Barack Obama and Congress prepared to resume budget talks and retailers slumped after the Christmas holiday.

The Shanghai Composite Index (SHCOMP) of domestic shares added 0.3 percent to 2,219.13, as a three-day increase pushed up the gauge to the highest level in more than five months. The measure has climbed 0.9 percent for the year. The Hong Kong stock market was closed for holidays.

Suntech, the world’s biggest solar-panel producer based in the Jiangsu province of China, jumped 7.6 percent to $1.27, the highest price since July 30. Trina Solar Co. (TSL), China’s third-largest manufacturer, advanced 4.9 percent to a two-month high of $4.46. LDK Solar Co. rallied 3.4 percent to $1.2, the most in a week.

Yingli’s Ranking

Yingli, China’s fourth-largest solar maker based in Baoding of Hebei province, soared 7.2 percent to $2.39 for the steepest advance since Dec. 12.

The company said one of its solar module product ranked second-best among 14 similar products in an energy-yield test among 11 manufacturers from Europe, North America and Asia, according to its statement yesterday.

Baidu, owner of China’s biggest online search engine, added 4.8 percent to $101.45, rising the most since Sept. 14.

The Beijing-based company has designed a speech recognition application similar to Apple Inc.’s Siri voice-command tool and is scheduled to start selling it this week, the WantChina Times reported yesterday, citing DoNews, a Chinese news website focusing on the technology industry.

Pactera Technology, based in Dalian city of China, surged 7.3 percent to $7.96, the highest level since Nov. 13.

The company said its board approved a plan for the company to buy back as much as $30 million of its shares over the next 12 months, according to its Dec. 21 statement.

Elong Inc. (LONG), the second-largest online travel agency in China with more than 70 percent of revenue from hotel booking, dropped 5.6 percent to $15.12 in New York, the biggest decliner on the Bloomberg China-US index.

China’s tourism revenue from overseas visitors dropped 3 percent to $3.9 billion in November from a year earlier, the nation’s tourism administration said on its website on Dec. 25.

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

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.