China Unicom (CHU) (Hong Kong) Ltd. and China Telecom Corp. led declines in U.S.-traded Chinese equities after monthly data showed the wireless carriers lost market share in third-generation services.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. dropped 1 percent to 101.82, the lowest level in a week. China Unicom, the nation’s second-largest mobile carrier, slid the most in three months and China Telecom dropped to the lowest price in September. Yanzhou Coal Mining Co. traded below its Hong Kong shares for a fourth day, while Baidu Inc. (BIDU) climbed to the highest level in 17 months.
China Unicom added 3.9 million third-generation mobile users in August and China Telecom increased 3 million, compared with 11 million for their bigger rival China Mobile Ltd. (941), the companies said this week. China will accept bids from foreign carriers for licenses to provide Internet services in the Shanghai free-trade zone as it plans to lift a ban on foreign websites such as Facebook Inc., the South China Morning Post reported yesterday, citing unidentified government officials.
“China Unicom’s 3G subscriber growth figure was below market consensus of above 4 million, which caused weakness in its stock,” Jun Zhang, an analyst at Wedge Partners Corp. in Greenwood Village, Colorado, said by phone yesterday. “People became concerned about China Unicom and China Telecom after seeing that China Mobile gained market share in 3G services.”
The iShares China Large-Cap ETF (FXI), the largest Chinese exchange-traded fund in the U.S., retreated 1.4 percent to $38.11 in New York, the most in four weeks. The Standard & Poor’s 500 Index (HSCEI) slipped 0.3 percent.
China Unicom’s American depositary receipts slumped 3 percent to $15.75, the steepest retreat since June 20. The Hong Kong-based company’s total 3G subscribers reached 107.8 million by the end of August, its monthly data showed.
ADRs of Beijing-based China Telecom declined 2.2 percent to $50.97, the lowest close since Aug. 30. The company had a total 93.4 million 3G users last month.
The National Development and Reform Commission will continue to supervise China Telecom and China Unicom in correcting their monopolistic behavior in the area of broadband access, China News Service reported yesterday, citing Xu Kunlin, head of the anti-monopoly bureau at the NDRC, the country’s top planning agency.
China Mobile’s ADRs slipped 0.6 percent to $56.70. The company had a total 158.7 million 3G customers, according to figures it released this week.
Baidu, owner of China’s most-used online search engine, climbed 0.6 percent to $150.13 in New York, the highest close since April 2012.
Users of Baidu’s video app on mobile devices exceeded 100 million, and daily active users surged to 20 million, according to a Sept. 23 report on NetEase’s website, citing the company.
“Quickly gaining a large number of users adds to Baidu’s bargaining power to form a legitimate relationship with video sources,” 86Research Ltd. said in a note to clients yesterday.
Yanzhou, China’s fourth-biggest coal producer, slipped 2.1 percent to a one-week low of $10.05. Its ADRs, each representing 10 ordinary shares in the Shandong-based company, traded 1.4 percent below its stock in Hong Kong.
The Hang Seng China Enterprises Index slipped 1.1 percent to 10,599.15 yesterday in a second day of slump, while the Shanghai Composite Index lost 0.6 percent to 2,207.53, snapping two days of gains.
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