Chinese equities rose for the first time in three days in New York, led by Vipshop Holdings Ltd. (VIPS) and Renren Inc. (RENN), on speculation the gauge will extend best quarterly performance in three years.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. climbed 1.4 percent to 102.91 yesterday, increasing for the first time in three days. Online retailer Vipshop jumped to a record and social media company Renren gained 8 percent. Bona Film Group Ltd. (BONA) surged to a one-year high and Youku Tudou Inc. (YOKU) advanced.
The China-US gauge rallied 18 percent last quarter, the most in three years. Investors have increased their asset allocation in Chinese stocks, with the exposure rising to about 60 percent from as much as 20 percent a year ago, 86Research Ltd. wrote in a note dated Sept. 30, citing analysts’ recent client visits. Chinese Premier Li Keqiang said this week the nation can meet its main economic targets this year.
“Interest in Chinese Internet companies has picked up substantially,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $700 million of assets, said in a telephone interview from Lisle, Illinois yesterday. “Some of the easy performance has been made and now some people late to the game are probably chasing and trying to find opportunities.”
The iShares China Large-Cap ETF (FXI), the largest Chinese exchange-traded fund in the U.S., climbed 1.4 percent to $37.60 in New York, rallying for the first time in a week. The Standard & Poor’s 500 Index added 0.8 percent in the first gain in three days, as investors assessed the potential economic impact from the shutdown of the U.S. government.
Vipshop, an online clothing retailer based in Guangzhou, jumped 7.1 percent to $60.85, the highest level since its U.S. listing in March 2012.
Renren, a social media platform based in Beijing, climbed to $3.64, rallying the most since Aug. 13. Trading volume was twice the daily average over the past three months, data compiled by Bloomberg showed.
Baidu, China’s most-used online search engine, bought about 59 percent of social commerce website Nuomi.com from Renren for about $160 million in August.
“There is market speculation that Baidu may buy the whole Nuomi.com unit if its business improves,” Papp said.
Sina Corp. (SINA), owner of the Twitter-like Weibo service in China, added 4.6 percent to $84.92 in New York, rising the most in two months. Youku, the nation’s biggest video website operator, jumped 4.6 percent to $28.66, the highest level since Sept. 19.
Bona climbed 5.7 percent to $5.55 in New York, the highest price in a year.
The Beijing-based company said Sept. 30 that Fosun International Ltd. (656), the investment arm of China’s biggest closely held industrial group, agreed to purchase a 6.4 percent stake in the movie production company from existing shareholders.
Markets in Shanghai and Hong Kong were closed yesterday for the National Day holiday. The Hang Seng China Enterprises Index (HSCEI) increased 11 percent in the third quarter, while the Shanghai Composite Index advanced 9.9 percent.
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