E-Commerce China Dangdang Inc. jumped to the highest close in four weeks after a report said the biggest Internet book retailer in China will operate online sales channels for Tencent Holdings Ltd.
American depositary receipts of E-Commerce, known as Dangdang, soared 10 percent to $5.87 in New York, the highest level since May 17. It was the biggest gainer on the Bloomberg China-US Equity Index of the most-traded Chinese shares in the U.S., which fell 0.9 percent to 90.50.
Dangdang has reached an agreement with Tencent, China’s biggest Internet company, to operate book and baby products sales in Tencent’s online store, the Chinese-language National Business Daily reported today, citing unidentified people at both companies. Tencent plans to invest $1 billion in its e-commerce unit, it said in a May 24 statement.
“People think Dangdang’s association with Tencent will be good as Tencent will spend on e-commerce,” Andy Yeung, a New York-based analyst for Oppenheimer & Co., said in a phone interview. “Dangdang has a strategy to use more common online marketplaces as channels to distribute their books and core products.”