July 18 (Bloomberg) -- Chinese stocks climbed in New York, as E-Commerce China Dangdang Inc. soared, after a jump in profit at Alibaba Group Holding Ltd. bolstered the outlook for online retailers.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. added 1 percent to 89.68 in New York, the highest close since June 7. Dangdang, the country’s biggest Internet bookseller, advanced to a one-month high. SouFun Holdings Ltd., a real estate information website, fell 3.4 percent after surging to a record July 16.
Net income at Alibaba, China’s largest e-commerce company, tripled to $669 million in the first quarter and sales jumped 71 percent to $1.4 billion as it prepares for a possible initial public offering. China’s State Council said this month that it will boost financial support for industries including information technology as the nation reduces its reliance on exports and heavy industries for growth.
“Alibaba’s top revenue suggests extremely strong growth in the e-commerce business,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which holds Dangdang and clothing retailer Vipshop Holdings Ltd. among its $700 million of assets, said in a phone interview from Lisle, Illinois. “The market is huge. There’s potential for continued growth.”
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., gained 0.6 percent to $33.83. The Standard & Poor’s 500 Index advanced 0.3 percent as Federal Reserve Chairman Ben S. Bernanke’s testimony to Congress eased concern that the central bank was planning to curtail stimulus.
Dangdang climbed 9.1 percent to $7.64, while Vipshop, based in Guangzhou, added 8.2 percent to a two-month high of $35.78.
Online retailing in China more than doubled each year from 2003 to 2011 and is projected to more than triple to $395 billion from 2011 to 2015, according to a McKinsey & Co. report in March. China’s Internet users rose to 591 million in June, from 564 million in December, according to the China Internet Network Information Center website.
The State Council pledged in a statement on July 5 to improve financial support for growth industries including information technology and environmental protection.
American depositary receipts of Yanzhou Coal Mining Ltd. gained 3.5 percent to $7.46. The ADRs traded 2.8 percent above equivalent shares in Hong Kong, the highest premium in four days.
SouFun fell to $31.80, after rallying 19 percent to a record on July 16. Trading volume yesterday was three times the daily average of the past three months. The company said in a statement that it’s “not aware of any particular reason for the unusual market activity in the company’s stock and is operating as usual.”
LightInTheBox Holding Co., the first Chinese company to go public in the U.S. this year, jumped 16 percent to $17.66. Shares of the Beijing-based online retailer have gained 86 percent since its initial public offering on June 6 when it raised $79 million.
Baidu Inc., owner of China’s biggest online search engine, gained 2.7 percent to $108.53, the highest close since February. Baidu said July 16 that it agreed to buy mobile application store 91 Wireless for $1.9 billion, its biggest announced acquisition, to gain a greater share of the wireless user market.
Moody’s Investors Service Ltd. said yesterday that the purchase would have no immediate impact on Baidu’s A3 credit rating as the company has “sufficient cash” to fund the deal.
The Hang Seng China Enterprises Index in Hong Kong climbed 0.7 percent to 9,480.85, while the Shanghai Composite Index dropped 1 percent to 2,044.92.
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