Chinese equities traded in New York posted the biggest two-week rally in 20 months, led by Internet companies, as NQ Mobile Inc. surged after starting a mobile music service.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. rose 0.4 percent to 101.72 yesterday for a weekly gain of 2.2 percent. NQ, which started a music application for mobile devices, jumped to a record. Solar maker Suntech Power Holdings Co. rose after announcing its chief executive officer’s departure. Youku Tudou Inc. jumped the most in eight months, while online retailer Vipshop Holdings Ltd. retreated after a six-day rally.
The China-US gauge has climbed 7.1 percent in two weeks, the most over such a period since January 2012. Internet companies from Qihoo 360 Technology Co. to YY Inc. reached record highs this week on speculation profitability in the sector will improve, while economic data released this month showed China’s growth is accelerating. Alibaba Group Holding Ltd., China’s biggest e-commerce company, is preparing the largest initial public offering since Facebook Inc.
“The excitement about China’s Internet names can go between now till the IPO of Alibaba as there’s a lot of guesses about which smaller companies might partner up with one of those bigger companies,” Eric Jackson, founder of Ironfire Capital LLC, a Naples Florida-based hedge fund that invests in Chinese stocks said by phone yesterday. NQ “has been doing well because Android has been growing in China and NQ’s core business is selling security software for Android phones.”
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., added 0.4 percent to $38.21 in New York, extending its gain for the week to 2.2 percent. The Standard & Poor’s 500 Index rose 0.3 percent, increasing a two-week rally, as disappointing economic data fueled bets that any Federal Reserve stimulus cuts this month would be moderate.
NQ’s American depositary receipts climbed 8.6 percent to $21.84, the highest level since its IPO in May 2011.
The Beijing-based company said it started a music app for mobile phones run on both Android and iOS platforms. It plans to expand the service into other countries “in the near future,” it said in a statement.
Youku Tudou, owner of China’s biggest video websites, jumped 8.9 percent to $26.83, the highest level since March 2012. Qihoo, which owns China’s most-used Internet browser, rallied 5.8 percent this week to $87.86, extending gains into a 12th week. Its ADRs slid 2.6 percent yesterday after reaching a record high of $90.85 Sept. 11.
ADRs of YY, an entertainment website, slipped 2.8 percent yesterday to $45.96. It reached $48.88 on Sept. 10, the highest level since its IPO in November.
Suntech, whose Chinese unit was forced into bankruptcy in March, jumped 9.2 percent to $1.30 yesterday. CEO David King will be replaced by Zhou Weiping, who takes over as CEO and chief financial officer on an interim basis, the Wuxi, China-based company said yesterday in a statement.
Vipshop declined 3.7 percent yesterday to $47.32, after a six-day rally sent it to a one-month high. It advanced 8 percent this week, the fourth weekly gain in a row.
The Hang Seng China Enterprises Index slipped 0.9 percent yesterday to 10,538.94. The Shanghai Composite Index retreated 0.9 percent to 2,236.22, ending the week up 4.5 percent, the most since February.