June 13 (Bloomberg) -- Chinese equities slumped for a third day in New York, driving their valuations to the lowest level in five weeks, as property and Internet companies sank.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. fell 0.9 percent to 87.32 as of 12:01 p.m., set for the lowest close in almost two months. SouFun Holdings Ltd., owner of China’s biggest real estate information website, retreated the most in a month and E-House China Holdings Ltd. slid to a seven-week low. Baidu Inc. dropped for a second day while Cnooc Ltd. traded at a discount to its Hong Kong stock for the first time in a week.
A three-day decline has driven companies on the China-US gauge to trade at 12 times estimated profit on average, the lowest level since May 3, data compiled by Bloomberg show. China’s economy will expand 7.5 percent this year, Skandinaviska Enskilda Banken AB predicted, joining Daiwa Securities Group Inc. in cutting growth projections after weekend data showed industrial output in May trailed estimates.
“Chinese stocks are cheap, especially when developed-world markets have greatly outperformed this year as well as in the last few years,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $700 million in assets, said in a telephone interview from Lisle, Illinois. “The new leadership’s focus is now on quality growth. China isn’t doing anything with monetary policy to create short-term growth, driving funds to developed markets with monetary easing policies.”
The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., fell 0.6 percent in New York to $34.61, extending a slide into a fourth day. The Standard and Poor’s 500 Index was little changed at 1,626.79, as investors weighed economic reports and the effect of rising bond yields on equities.
Stock trading in Hong Kong and Shanghai resumes today after being closed for a holiday. The Hang Seng China Enterprises Index tumbled 1.7 percent to an eight-month low of 9959.74 on June 11.
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