NQ Mobile Jumps as Cash Crunch Eases: China Overnight

Chinese stocks climbed to a one-week high in New York, led by NQ Mobile Inc. (NQ) and Huaneng Power International Inc. (HNP), as dropping money-market rates showed the worst cash crunch in a decade has eased.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. gained 1.5 percent to 84.37 yesterday, trimming this month’s slide to 6 percent. NQ soared the most since March after the mobile security company expanded product offerings to Chicago-based U.S. Cellular Corp. Huaneng, China’s biggest electricity producer, jumped 6.6 percent while solar makers extended a rally on a report the government plans to increase subsidies.

China’s seven-day repo rate, a measure of interbank liquidity, dropped for a fourth day after the People’s Bank of China said June 25 that it provided financing to some institutions to stabilize money-market rates. The Hang Seng China Enterprises Index (HSCEI) in Hong Kong rose for a second time this month after sliding to the lowest close since October 2011.

“The PBOC statement to support the interbank rate and injection of liquidity relaxes market concerns,” Michael Ding, the lead manager of the China Region Fund at U.S. Global Investors Inc., said by e-mail from San Antonio, Texas.

The iShares FTSE China 25 Index Fund (FXI), the largest Chinese exchange-traded fund in the U.S., rallied 1.8 percent to $32.26 for the steepest increase in two months. It’s a rebound after reaching the lowest level since October 2011 the previous day. The Standard & Poor’s 500 Index climbed for a second day, adding 1 percent as slower-than-forecast economic growth in the U.S. fueled speculation the Federal Reserve will maintain stimulus.

Security Software

NQ Mobile surged 7.9 percent to $8.32, the highest price since June 13. The Beijing-based company agreed with U.S. Cellular to offer two mobile-security software products to the American carrier, which has 5.2 million customers, NQ said in a statement yesterday. The partnership started in February.

Huaneng, which operates coal-fired power plants in China, jumped to $37.46, the highest close in two weeks. The American depositary receipts traded 1.1 percent above the Hong Kong stock, the biggest premium since June 13. The ADRs, each representing 40 underlying shares in the Beijing-based company, have tumbled 24 percent from a five-year high reached May 15.

China’s Bohai-Rim Steam-Coal Price Index, which tracks power-station coal prices at six Chinese ports, fell 0.7 percent in the week through yesterday, according to the Qinhuangdao Seaborne Coal Market website.

Huaneng’s benefits from the lower coal prices, according to Ding at the China Region Fund. (USCOX) “Its share price was beaten due to fear of a tariff reduction in China,” he said.

Yanzhou Coal

Yanzhou Coal Mining Co. (YZC), China’s fourth-largest coal producer, sank 2.1 percent to $7.62, adding its loss this year to 55 percent.

Trina Solar Ltd. (TSL), the fourth-largest solar-panel maker globally, soared 5.6 percent to $5.66, its biggest rally in two weeks. Suntech Power Holdings Co. climbed 4 percent to $1.04 while Yingli Green Energy Holding Co. advanced 3.9 percent to $3.18 in New York.

China may double surcharges to subsidize renewable energy projects, the Economic Information Daily reported yesterday, citing unidentified people. The plan may start around July, according to the report.

E-Commerce China Dangdang Inc. (DANG) retreated 3.5 percent to $6.83 in New York after surging 14 percent on the prior day. The company had the biggest drop on the China-US gauge. Trading volume on its ADRs was twice the daily average over the past three months, data compiled by Bloomberg showed.

The Hang Seng enterprises gauge jumped 3.3 percent to 9,164.64, advancing for the first time in seven days. The Shanghai Composite Index (SHCOMP) slipped 0.4 percent to 1,951.50, the weakest level since January 2009.

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

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

Bloomberg reserves the right to edit or 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.