The Bloomberg China-US Index of the most traded Chinese stocks in the U.S. advanced 0.6 percent to a two-year high of 108.77 yesterday. Sina, owner of the Twitter-like Weibo service in China, gained the most in four weeks. E-House, a Shanghai-based property brokerage, soared 11 percent as data showed Chinese home sales rose to a two-year high. Online travel agency Ctrip.com International Ltd. (CTRP) gained the most in a month while Baidu Inc. advanced to a record.
Twitter Inc. rose to the highest since its November initial public offering as new advertising products spurred optimism about the social-networking company’s sales growth. China’s retail sales unexpectedly accelerated in November while industrial output rose 10 percent from a year earlier, government data showed yesterday.
“Sina owns one of the dominant social media platforms in China, just like Twitter and Facebook in the U.S., so the nice stock performance of Twitter helps Sina,” Michael Ding, the lead manager of the China Region Fund at U.S. Global Investors, which oversees $2.2 billion, said by phone from San Antonio yesterday. “We got some strong November figures in China, and we are pretty bullish on its stocks in 2014 should the reforms announced by the government be implemented.”
Chinese officials started an annual meeting yesterday to decide economic policies for next year after last month agreeing on the broadest long-term reforms since the 1990s.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slipped 0.1 percent in a second day of declines to $39.83 in New York. The Standard & Poor’s 500 Index slipped 0.3 percent as investors weighed federal budget negotiations and better-than-estimated economic data to gauge the timing of any Federal Reserve stimulus cuts.
Sina, based in Shanghai, surged 6.8 percent to $80.95 in New York, the biggest rally in four weeks. Trading volume was 1.9 times the three-month average compiled by Bloomberg. San Francisco-based Twitter, which sold shares at $26 apiece in its Nov. 6 IPO, surged to a record $51.99 yesterday.
Shares of Shanghai-based E-House surged to $13.13 in New York, the highest level since April 2011.
The value of homes sold in China rose 19 percent to 720.4 billion yuan ($119 billion) last month, the highest since December 2011, from 604.8 billion yuan in October, according to calculations based on the National Bureau of Statistics data. Housing sales in the January-November period surged 31 percent from a year earlier to 5.9 trillion yuan, the data released yesterday showed.
Ctrip, China’s biggest online travel agency, jumped 5.2 percent to $49.19, gaining the most in five weeks. The Shanghai-based company was among top stock picks for 2014 at Raymond James & Associates.
Baidu, China’s biggest online search engine, rose 4.7 percent to $179.93, a record since its August 2005 U.S. IPO. Trading volume was 1.8 times the 90-day average, according to data compiled by Bloomberg.
China Mobile Ltd. (CHL), the nation’s biggest mobile phone carrier, fell 1.8 percent to $53.78 in New York, the biggest slump since Oct. 23. Its American depositary receipts traded 0.8 percent below its stock traded in Hong Kong, the widest discount in a week. Each ADR stands for five underlying shares of the Hong Kong-based company. ADRs of China Unicom (Hong Kong) Ltd. (CHU), the nation’s second-largest wireless network operator, retreated 1.2 percent to $15.36, the lowest level since Nov. 14.
Barclays Plc cut its recommendation on the two phone operators to the equivalent of sell while maintaining China Telecom Corp. (728) at hold, according to an e-mailed report. There’s “no incentive” to focus on profit growth, Barclays analysts led by Anand Ramachandran said. The three carriers received licenses on Dec. 4 to start selling fourth-generation services.
Barclays reduced its price estimate for China Mobile’s Hong Kong shares by 24 percent to HK$76, saying the company has the incentive to “aggressively” push its TD-LTE 4G network at the cost of profits.
“The weakness in the carriers’ stocks showed investors expectations that the 4G licenses won’t help much with the companies’ earnings growth in 2014,” Di Zhou, a Santa Fe, New Mexico-based equity analyst at Thornburg Investment Management, said by phone yesterday.
Vipshop Holdings Ltd., a Guangzhou-based online clothing seller, added 0.2 percent to $80.46, rebounding from an earlier tumble of as much as 11 percent. Muddy Waters Research LLC, founded by short-seller Carson Block, said reports it was drafting a report on the company was a “complete hoax.”
The Hang Seng China Enterprises Index in Hong Kong slipped 0.4 percent to 11,382.16, slumping the most in a week, while the Shanghai Composite Index (SHCOMP) fell less than 0.1 percent to 2,237.49.
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