Solar manufacturers drove a rally in Chinese stocks traded in New York, led by Suntech Power Holdings Co., amid growing optimism that global demand for renewable energy will improve producers’ profitability.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. added 0.7 percent to a seven-month high of 98.85 yesterday. Suntech surged 12 percent and Trina Solar Ltd. rose to a two-year high. Internet data center operator 21Vianet Group Inc. soared as it plans to buy back $10 million of shares and Sina Corp. jumped after China Business News reported Alibaba Group Holdings Ltd. is in talks with the social media company to buy a stake in its video business.
Japan and China will provide new growth for solar energy after profitability improved for producers in the second quarter as average selling prices stopped falling, according to an analyst report by Bloomberg Industries. Deutsche Bank AG said in a note this week that growth in the U.S. solar market over the next few years will benefit Chinese manufacturers including Trina and Yingli Green Energy Holding Co.
Many investors have concluded that “margins have troughed for the solar companies,” Gordon Johnson, an analyst with Axiom Capital Management Inc. said by phone in New York. “A number of well-respected analysts are now making calls that grid parity is going to drive significant installations of solar in key markets.”
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., climbed for a fifth day, rising 1 percent to a three-month high of $37.23. The Standard & Poor’s 500 Index gained 0.1 percent as investors weighed data on the labor market and American services industry before the monthly jobs report.
Suntech’s American depositary receipts jumped to $1.12, rising the most since July 15. Trina added 3.6 percent to $11.14, the highest price since September 2011. Baoding, China-based Yingli, the world’s biggest panel-maker, gained 4.2 percent in its fifth day of rally to $5.51, the highest level since February 2012.
Developers will spend more than $134 billion annually by 2020 on solar-energy systems, up 51 percent from this year, as falling panel prices make electricity produced from sunlight cost-competitive with power from other sources, according to a July report from Navigant Consulting Inc. By 2017, the year after some U.S. tax incentives are cut, solar power will achieve grid parity “in most major markets,” meaning it’s able to compete subsidy-free with traditional generators.
21Vianet, based in Beijing, said its board authorized a plan to repurchase as much as $10 million of shares on the open market with the company’s cash, according to a statement yesterday.
Its ADRs surged 7.2 percent to $14.82 in New York, the highest price since May 2011.
Sina, owner of Weibo, a Twitter-like service provider in China, advanced 4.3 percent to $82.84, increasing the most in a month.
Alibaba, China’s biggest e-commerce company, is talking to Sina to buy a stake in Sina’s video service, China Business News reported yesterday, citing an unidentified person with knowledge with Alibaba’s plan. In April, Alibaba agreed to pay $586 million for about 18 percent of Sina’s Weibo unit.
YY Inc., owner of an entertainment website, rose 6.8 percent in its third day of advances to a one-month high of $43.70. ADRs of the Guangzhou-based company were raised to a buy equivalent at Pacific Crest Securities LLC from hold.
The Hang Seng China Enterprises Index advanced 1 percent to a three-month high of 10,338.89. The Shanghai Composite Index slipped 0.2 percent to 2,122.43, declining for the first time in a week.