Chinese stocks traded in New York fell for a third day as lending slowed while the money supply expanded the least in a decade, underscoring the risk of a sharper slowdown in the world’s second-biggest economy.
The Bloomberg China-US 55 Index of the most-traded Chinese stocks extended this week’s slide, slumping 1.5 percent to 94.68 at the close in New York, the lowest since Nov. 25. Trina Solar Ltd. fell 9.3 percent and Yingli Green Energy gave up 7 percent as First Solar Inc., the largest U.S. solar manufacturer, cut sales and profit guidance. Spreadtrum Communications Inc. plunged 6.3 percent, extending the loss from a Nov. 15 record high to 34 percent.
New local-currency lending fell to 562.2 billion yuan ($88 billion) in November, from 587 billion yuan a month earlier. The money supply expanded 12.7 percent, the least since May 2001. The Conference Board’s Chinese leading index declined 0.1 percent to 160.1 in October, according to a Dec. 14 statement. The gauge measures prospects for the next six months.
“It’s all pointing to a story of continued slowdown,” Andrew Polk, a Beijing-based economist at The Conference Board, said on Bloomberg Television. “We see it as a gradual slowdown that will continue over the next three to six months. It’s a broad-based slowdown.”
Chinese stocks fell for a fifth day in Shanghai and Hong Kong, the longest streak of losses since the period ended Nov. 23. The Hang Seng China Enterprises Index, which tracks Chinese companies, retreated 0.7 percent. The Shanghai Composite Index of domestic shares lost 0.9 percent to the lowest since March 18, 2009. The measures have plunged this year on mounting concern that Chinese monetary policy and Europe’s debt crisis are slowing growth in the world’s most populous nation.
China’s domestic bourse has underperformed markets in Russia and Brazil this year. India’s Sensitive Index, or Sensex, has lost 23 percent, compared with the Shanghai measure’s 21 percent fall.
Chinese solar manufacturers declined as First Solar, the largest maker of thin-film solar panels, cut profit and sales estimates and announced its second restructuring in six weeks. A separate move by China to limit the number of companies that can make polysilicon, the main ingredient in most solar panels, won’t curb an oversupply of the material, said Gordon Johnson, an analyst at Axiom Capital Management in New York.
Suntech Power Holdings Co., the largest solar panel maker in the world, declined 4.2 percent. LDK Solar Co., in Jiangxi, China, slipped 3.4 percent.
The solar companies are among the worst performers on the China-US index this year. Trina and Suntech have lost more than 70 percent of their value and Yingli has tumbled 63 percent.
China’s benchmark Shanghai Composite Index may gain 20 percent to 25 percent next year as the government eases monetary policy to support economic growth, according to BNP Paribas SA.
‘Bullish on Chinese Stocks’
“I am bullish on Chinese stocks next year, though we won’t see a bounce-back rally like in 2009,” Dorris Chen, head of China research at BNP Paribas, France’s biggest bank, said in an interview at Bloomberg’s offices in Shanghai.
Yanzhou Coal Mining Co., China’s fourth-largest producer of the fuel, lost 4.2 percent to $20.76, the lowest in two months. Each American depositary receipt is the equivalent of 10 ordinary shares. The shares fell to HK$16.64 in Hong Kong trading, or $2.14, a premium of about 6 cents.
Analysts at Sanford C. Bernstein & Co. cut their price target for Yanzhou Coal and lowered their rating to “underperform” from “market perform”.
Simcere Pharmaceutical Group, a Nanjing, China-based drug company, rose 3.4 percent to $7.60, the highest in a month. The company will expand a collaboration with Bristol-Myers Squibb Co. to develop a cholesterol drug, according to a statement released after the close of U.S. trading Dec. 13.
Focus Media Holding Ltd., the Shanghai-based advertising company defending itself against short seller Carson Block, said a research firm confirmed the size of its advertising network. The shares fell 3.3 percent to $19.72.
China ETF Options
The IShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., lost 1 percent to $34.38.
Options traders are paying the most since August 2010 to protect against losses in Chinese stocks as growth and exports slow. Six-month puts on the China 25 Index Fund cost 23 percent more than calls, according to data compiled by Bloomberg. The price relationship known as skew jumped to 24 percent on Dec. 9, reaching the highest level in 16 months. The average for the last five years is 13 percent.
HSBC Holdings Plc and Markit Economics are scheduled to release a preliminary manufacturing index for this month, known as the Flash PMI, today. It was at 48 last month, below the 50 threshold for expansion.
The Chinese yuan fell 0.1 percent to 6.3706 per dollar in Shanghai, according to the China Foreign Exchange Trade System.