- Vipshop, Noah rose 20% for best performance on ADR gauge
- Among tech companies, 14 of 18 have beaten earnings estimates
Chinese stocks trading in New York rose for a seventh week out of eight as investors bet the government may roll out more policies to bolster the economy after earnings from companies in old-growth industries trailed analysts forecasts.
The Bloomberg China-U.S. Equity Index rose 6.1 percent last week, the biggest five-day gain since Oct. 2. American depositary receipts of Noah Holdings Ltd. surged 20 percent to $32.79 in the five days through Friday as the wealth manager reported sales growth of 30 percent in the third quarter. Vipshop Holdings Ltd., an online retailer selling discounted fashion products, also soared 20 percent to $16.35, the most since March 2014. The two stocks were the best performers on the ADR gauge.
Fourteen of 18 U.S.-traded Chinese technology companies that have reported financial results for the most recent quarter exceeded analysts’ estimates, according to data compiled by Bloomberg. Meanwhile, more than half of the 10 industrial companies and two-thirds of the 19 financial firms in the MSCI China Index trailed forecasts. Weakening earnings from traditional industries are adding to signs of a slowdown in the economy as policy makers seek to transition away from reliance on manufacturing and construction for growth.
“The anticipation the Chinese government will ease policy measures again before the end of the year is driving the market,” Ankur Patel, chief investment officer at R-Squared Macro Management LLC, said by phone from Birmingham, Alabama on Friday.
Sina Corp. advanced 15 percent last week to $51.54 after announcing better-than-estimated earnings. Property consulting firm Leju Holdings Ltd. fell 5.6 percent last week to the lowest since Sept 25. Investment banks including UBS Group AG, Bank of America Corp. and Macquarie Group Ltd. cut their ratings for Sina last week as the company reported revenue that missed forecasts last quarter.
“We view China as not being the disaster that people think,” Gary Greenberg, head of emerging markets at Hermes Investment Management Ltd., said in an interview in New York on Thursday. “What China obviously wants to become is more of a consumer economy.”
The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF, the biggest U.S. exchange-traded fund investing in mainland shares, lost 0.3 percent on Friday, narrowing the weekly gain to 4.6 percent.