Chinese solar makers fell in New York on speculation a government measure to curb excess capacity won’t be enough to lift panel prices. NQ Mobile Inc. rose after introducing a mobile game in North America.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. was little changed at 102.2 yesterday. Yingli Green Energy Holding Co., the largest solar-panel maker, dropped 3.7 percent, and LDK Solar Co. slid after a Chinese credit rating agency cut it to junk. Suntech Power Holdings Co. sank for a second day. NQ Mobile led gainers in the measure, while Qihoo 360 Technology Co. rebounded after an 8.7 percent, three-day slump.
China will control the construction of new photovoltaic manufacturing projects to curb excess capacity in the world’s biggest maker of solar panels, and new producers that expand capacity will be banned, the Ministry of Industry and Information Technology said yesterday on its website. A global oversupply of solar panels led to a 20 percent plunge in average prices last year, according to data compiled by Bloomberg. Photovoltaic manufacturers make equipment needed to generate solar power.
“The Chinese government will not be able to solve the oversupply issue overnight,” Chris Kettenman, the chief energy strategist at Prime Executions Inc. in New York, said in a telephone interview yesterday. “While policy change is a start, it doesn’t fully address the structural oversupply issues. Too much direct policy intervention to re-balance markets is never a good thing either.”
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slipped 0.5 percent to $38.41 in New York, the first decline in three days. The Standard & Poor’s 500 Index advanced 0.4 percent to a one-month high as Microsoft Corp. announced a $40 million buyback and Federal Reserve policy makers begin a two-day policy meeting.
Yingli, based in Baoding, China, dropped to $5.54, the first decline in three days. Suntech, whose China unit was forced into bankruptcy in March, sank for a second day, slumping 3.2 percent to $1.21.
Credit rating of LDK, the second-biggest maker of solar wafers, was cut to B+ from BBB+ by Shanghai Brilliance Credit Rating & Investors Services Co., according to a report yesterday on Chinamoney.com.cn, a website of the China Foreign Exchange Trade system. The rating company cited continued declines in output and sales, idle capacity and excessive debt repayment pressure as reasons for the downgrade. LDK’s ADRs retreated 1.3 percent to a three-day low of $1.55.
Gods & Dragons
NQ Mobile, a developer of mobile-security software that also operates games on mobile devices, jumped 9.2 percent to a record $22.52 in New York, after losing the most in a month Sept. 16.
The Beijing-based company said yesterday its games unit started offering Gods & Dragons, one of the top-five games for devices using Apple Inc.’s platform in China, in the U.S. and Canada. It also started last week Music Radar, a music search app for mobile devices running Android and iOS platforms.
The company is “moving toward a mobile search play and its Music Radar is bigger than you thought because it will ultimately be developed into a voice and picture search tool for smartphones,” Jun Zhang, an analyst at Wedge Partners Corp. in Greenwood Village, Colorado, said by phone yesterday. “The new products will help drive its growth.”
Qihoo, which owns China’s second-biggest online search engine, gained 1.9 percent to $84.51, rallying the most in a week.
Beijing-based Qihoo tumbled 5.6 percent on Sept. 16 after Tencent Holdings Ltd., China’s largest Internet company by market value, paid $448 million for a 36.5 percent stake of Sogou, a smaller search engine owned by Sohu.com Inc. Sohu Chief Executive Officer Charles Zhang said this week that talks with Qihoo have ended and the company won’t seek additional investors for its Sogou unit in the “near future.”
Qihu’s share in the Internet search market rose to about 20 percent on Sept. 14, 86Research Ltd. wrote in a note yesterday, citing data from CNZZ. The company’s “management appeared to be confident in increasing search traffic organically to 30 percent even without buying Sogou,” according to the report.
The Hang Seng China Enterprises Index fell 0.5 percent yesterday to 10,650.64, retreating from the highest level since May. The Shanghai Composite Index sank 2.1 percent to 2,185.56, extending its decline into a third day.