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Consumer Stocks Top Gain as ETF Jumps on Growth: China Overnight

Chinese consumer stocks rose in New York and the nation’s largest exchange-traded fund in the U.S. climbed to a two-week high after growth in the Asian country’s economy accelerated for the first time in two years.

The iShares FTSE China 25 Index Fund (FXI) advanced 0.8 percent to $41.7 in New York, the highest level since Jan. 2. Budget hotel operator China Lodging Group Ltd. (HTHT) and China Southern (ZNH) Airlines Co. drove gains on the Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. Sina Corp. (SINA), owner of the Twitter-like Weibo service in China, jumped the most in a week.

The rally in the China-U.S. gauge followed a 2.1 percent jump in the benchmark for Chinese stocks traded in Hong Kong, after government data showed December retail sales and industrial production grew at the quickest pace in nine months. The world’s second-largest economy expanded at a faster-than- estimated 7.9 percent for the fourth quarter, up from a three- year low of 7.4 percent in the previous period.

“The data confirmed improving consumer confidence we’ve found in China in the last three months and most figures came out a bit better than most people expected,” David Riedel, the president of Riedel Research Group Inc. said in a phone interview yesterday from San Francisco. “Consumption-related stocks, including hotels and travel agencies should benefit and we expect the government to roll out more measures to encourage domestic consumption.”

China Tourism

The China-US Equity measure climbed 0.7 percent to 101.69, posting a weekly advance of 0.4 percent. The Standard & Poor’s 500 index, jumped 0.3 percent to 1,485.98 for a third weekly rally as investors weighed prospects for a short-term lift on the U.S. debt ceiling.

The Hang Seng China Enterprises Index (HSCEI) surged to a five- month high of 12,105.71 yesterday, while the Shanghai Composite Index (SHCOMP) of domestic Chinese shares added 1.4 percent to 2,317.07 for a five-day gain of 3.3 percent, the steepest in three weeks.

China Lodging, a Shanghai-based budget hotel operator, climbed 3.2 percent to $18.58 after a three-day slide. Ctrip.com International Ltd. (CTRP), the biggest online travel agency in China, gained 2 percent to $24.49 for the steepest advance in two weeks. China Southern, Asia’s largest carrier by passenger numbers, added 2.3 percent to $28.83.

Airline Traffic

China’s total tourism income in 2012 is expected to rise 15.1 percent from 2011 to 2.59 trillion yuan ($420 billion), according to a Jan. 10 report on the website of China Tourism Academy, a research agency supervised by the nation’s tourism administration. The academy forecasts tourism sales will increase 14.2 percent in 2013 to 2.96 trillion yuan.

Chinese airline passenger traffic gained 11.8 percent in December from a year earlier to 23.8 million, CAAC News, the newspaper attached to China’s Civil Administration reported on Jan. 17, citing preliminary statistics for 2012.

Shanghai-based Sina climbed 3.3 percent to $55.63 in New York, extending its gains this year to 11 percent.

ADRs of Vimicro International Corp. (VIMC), a Beijing-based audio and video signal processing chipmaker, added 6.1 percent to $1.75, the highest level in 13 months. Its seven-day rally was the longest winning stretch since September 2009.

The company targets a 30 percent growth in sales in 2013 as it focuses on domestic sales of video surveillance systems, Chief Executive Officer John Deng said in an interview at Bloomberg’s headquarters in New York yesterday. Its business will benefit from rising demand for safety in Chinese cities as the nation seeks economic growth from urbanization, he said.

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

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

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