Chinese online retailers from E-Commerce China Dangdang Inc. (DANG) to Jumei International Holding Ltd. (JMEI) dropped in U.S. trading on concern a government campaign against sales of counterfeit goods will crimp revenue.
Dangdang tumbled 6.2 percent to cut this year’s rally to 25 percent, while online beauty product seller Jumei slid to a three-week low. JD.com Inc. (JD), China’s second-largest shopping site, declined for a second day, trimming gains since its U.S. debut to 36 percent. The Bloomberg China-US Equity Index sank 0.7 percent to 105.10 in New York.
China will run a campaign from July to November to crack down on trademark infringements and sales of fake goods on the Internet, according to a notice on the State Administration for Industry and Commerce’s website yesterday. The actions will target online transaction platforms and group-buy websites, the agency said. Vipshop Holdings Ltd. (VIPS), a Guangzhou-based online fashion goods seller, retreated after posting a 126 percent surge in the year to June 18.
The sale of fake and pirated goods “is always a potential risk for shopping websites in China,” Jeff Papp, senior analyst at Oberweis Asset Management Inc., which oversees $1 billion in Lisle, Illinois, said by e-mail. “It may be just a reason for some profit-taking as all have done quite nice lately.”
Dangdang’s American depositary receipts fell to $11.92 in New York for the steepest slump in a month. Jumei slid 4.2 percent to $25.30, cutting its advance since last month’s U.S. listing to 15 percent.
Vipshop sank 2.2 percent to $184.87 in New York, dropping for the first time in four days. ADRs of JD.com slipped 2.6 percent to $25.83.
Trading of China Mobile Games & Entertainment Group Ltd. (CMGE) was halted after the shares tumbled 23 percent, the biggest drop since its U.S. debut in September 2012.
Nine senior managers at the Guangzhou, China-based company were suspended, including President Shuling Ying, for alleged involvement in bribery with game developers, Chao Wang, a Hong Kong-based analyst at Nomura Holdings Inc., wrote in a note, citing a China Mobile Games conference call.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., dropped 0.9 percent to $37.93, declining the most in eight weeks. The Standard & Poor’s 500 Index rose 0.1 percent to a record, extending gains after the Federal Reserve’s vow to keep interest rates low amid signs of an economic recovery.
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