Solars Lead Jump to 1-Month High as Focus Slips: China Overnight
Chinese equities in New York rose, pushing the benchmark index to a one-month high, as solar stocks jumped and as improving U.S. employment data bolstered the outlook for the nation’s second-biggest export market.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. climbed 0.2 percent to 93.87 by 2:37 p.m., set for the highest close in a month. JinkoSolar Holding Co. (JKS) surged 13 percent, spurring gains in Trina Solar Ltd. (TSL) and LDK Solar Co. (LDK), after the solar manufacturer said a unit would get as much as $1 billion in state aid. Focus Media Holding Ltd. (FMCN) was poised for its steepest drop since September after Dow Jones Newswires reported CDH Investments Fund Management Co. is withdrawing from the group bidding to take the company private.
Thirty-day volatility on the China-US gauge dropped for a second day, as the U.S. Labor Department said payrolls rose more than economists expected in November and the jobless rate in the world’s largest economy sank to the lowest in almost four years. The U.S. is the second-biggest consumer of Chinese exports after Europe, accounting for 17 percent of the nation’s overseas shipments, according to Shenyin & Wanguo Securities Co.
“You have a global economy that, at least in the U.S., no longer appears to be getting worse, and as a major export destination for China that helps,” Jim Oberweis, who oversees $700 million as president of Oberweis Asset Management Inc. in Lisle, Illinois, said by phone yesterday. “From a macro standpoint, it appears that the worst is probably behind us.”
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., increased 0.3 percent to $38.38, headed for the highest close in almost nine months. The ETF posted a weekly gain of 3.3 percent.
The Standard & Poor’s 500 Index was little changed at 1,414.70 as a report showing consumer confidence in the U.S. declined to a one-year low in December overshadowed the employment data.
The China-US Index has gained 1.1 percent this week, and is poised for a 4.2 percent advance in 2012.
JinkoSolar’s agreement with China Development Bank Corp. is part of the government’s effort to provide support for selected manufacturers it thinks are most likely to survive, the company’s Chairman Li Xiande said to reporters in Zug, Switzerland yesterday. Jiangxi, China-based JinkoSolar rose to $4.60 in New York, the biggest one-day gain since Nov. 26. The stock is up 8.5 percent this week.
Xinyu-based LDK, the world’s second biggest maker of wafers for solar panels, jumped 8.2 percent to 97 cents, trimming a 17 percent weekly decline, while Trina, China’s third-largest maker of solar panels, based in Changzhou, climbed 8.3 percent to $3.06, the highest price since Nov. 13. It’s up 6.5 percent in the week.
Focus Media, the Chinese advertising company subject to a $3.5 billion buyout offer, sank 3.3 percent to $23.93 after a report that one of the private equity firms involved in the bid has dropped out. CDH Investments Fund Management Co. was to invest about $200 million in the buyout and dropped out because it felt returns on the investment weren’t sufficient, Dow Jones Newswires reported, citing a person it didn’t identify with knowledge of the deal.
CDH and Jing Lu, responsible for Focus Media’s investor and media relations, didn’t immediately reply to e-mails sent after business hours in the Chinese capital. The buyer consortium includes Washington-based Carlyle Group LP (CG), whose spokesman Chris Ullman declined to comment on the report.
Youku Tudou Inc. (YOKU), China’s biggest online video company, dropped 7 percent to a record-low $13.94.
The company’s mobile application was dropped from the Apple Inc. app Store, according to a Dec. 5 report on TechWeb.com, and the company may not realize the gains in market share that it anticipated when Youku and Tudou Holdings Ltd. merged in March, Echo He, an analyst at Maxim Group LLC who rates the stock hold, said by phone in New York.
New Oriental Education & Technology Group Inc. (EDU) rose for a second day, adding 0.8 percent to $17.52. The advance trimmed a weekly decline of 13 percent, the biggest slump since July.
The Securities and Exchange Commission accused the Chinese units of the Big Four accounting firms this week of blocking fraud investigations into nine China-based companies by withholding documents. New Oriental tumbled 11 percent on Dec. 4 as Wells Fargo & Co. said in a note that concern that the disagreement between the U.S. and China over auditor oversight will spur delistings may weigh on the company’s valuation. The bank later clarified the note to state they weren’t implying New Oriental was under investigation by the U.S. regulator.
The Beijing-based education services provider isn’t one of the companies being probed by the SEC, President Louis Hsieh said in a Dec. 5 interview.
Melco Crown Entertainment Ltd. (MPEL) climbed 2.5 percent to $15.17 after the Macau casino operator announced it was buying a 93.1 percent stake in Laguna, Philippines-based Manchester International Holdings Unlimited Corp. (MIH) The stock is down 0.7 percent in the week and traded at a 2.4 percent premium to its Hong Kong shares yesterday.
The Hang Seng China Enterprises Index (HSCEI) added 0.5 percent to 10,919.24 yesterday, capping a 2.8 percent advance in the week, while the Shanghai Composite Index (SHCOMP) of domestic shares gained 1.6 percent to 2,061.79, the highest level since Nov. 12. The measure rose 4.1 percent this week, the most since October 2011.
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