Solars Lead ADR Drop on PBOC Withdrawals: China Overnight
Chinese equities traded in New York slumped, pushing the benchmark index to an 11-week low, on concern moves by central banks to limit stimulus globally will stifle a recovery in the world’s second-largest economy.
The Bloomberg China-US Equity Index slid 1.2 percent to 93.28 yesterday, falling for a fifth day in the longest stretch of declines since September. Trina Solar Ltd. dropped the most in three months as Reuters reported that European Union nations approved a plan to register Chinese solar panels, citing unidentified EU diplomats. SouFun Holdings Ltd., China’s biggest real estate information website, slipped to a 2013 low and Qihoo 360 Technology Co. sank the most since December.
The People’s Bank of China drained a record 910 billion yuan ($146 billion) out of the financial system this week, as Premier Wen Jiabao ordered cities to take steps to rein in the property market after prices rose the most in two years in January. The China-US gauge, poised for its worst month since May, fell 1.1 percent Feb. 20 after Federal Reserve minutes showed division over asset buying known as quantitative easing.
“The market is worried about tightening policies,” Michael Ding, the lead manager of the China Region Fund at U.S. Global Investors Inc., which oversees $2.2 billion, said by e-mail from San Antonio, Texas. “Profit-taking is happening as we have not heard much about any new stimulus. You also have the Fed talking about an exit from quantitative easing and China’s central bank worrying about inflation.”
The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., tumbled for a third day, losing 1.4 percent to a 10-week low of $38.51 in New York. The Standard & Poor’s 500 Index retreated 0.6 percent to 1,502.42, the lowest level in more than two weeks.
Trina Solar, the world’s third-biggest maker of solar panels, sank 9.3 percent to $4.50 in New York, the steepest drop since Nov. 14. Changzhou, China-based Trina has lost 13 percent this month after surging 80 percent in January and December.
Yingli Green Energy Holding Co., the world’s biggest silicon-based solar panel maker by capacity, slipped 6.3 percent to $2.98, the biggest loss in six weeks. Xinyu, China-based LDK Solar Co. retreated 6 percent to $1.74, trimming its rally this year to 21 percent.
European Union member states have approved a plan to register solar panels imported from China, which would allow duties to be imposed on imported China solar components if their selling prices were found to be below cost, Reuters reported Feb. 20, citing unidentified EU diplomats. John Clancy, the European Commission’s trade spokesman, confirmed by e-mail yesterday that companies in the bloc had requested that imports of solar components from China be subject to registration.
The step indicated “an escalation to the trade war,” Aaron Chew, a New York-based senior analyst at Maxim Group LLC said by e-mail yesterday. “The solar sector was being carried up along with the markets. It’s no coincidence that the broader market taking it on the chin for two days in a row and the solar sector has reversed swiftly and sharply.”
Suntech Power Holdings Co., the world’s biggest panel maker, sent a statement to China’s Global Times yesterday opposing what it called “unnecessary” solar taxes, the Beijing-based newspaper reported. The EU opened a probe in September into whether Chinese manufacturers of solar panels are selling them in the 27-nation bloc below cost, a practice known as dumping.
Suntech, based in China’s Jiangsu province, fell 4.7 percent to $1.43, taking its loss this year to 6.5 percent.
Soufun, based in Beijing, declined for a third day, dropping 4.6 percent to $24.7, the lowest price since Dec. 28. Trading volume on its American depositary receipts was 1.8 times the daily average over the past three months, data compiled by Bloomberg show. E-House China Holdings Ltd., a property brokerage company based in Shanghai, lost 3.2 percent to $4.47, retreating for a fourth day.
Sina Corp., the biggest Twitter-like Weibo service provider in China, retreated 2.8 percent to $54.8 after jumping 5.4 percent on Feb. 20. Registered users for Sina’s Weibo rose 73 percent from a year earlier to 503 million by the end of 2012, Chief Executive Officer Charles Chao said on a conference call on Feb. 19.
Renren Inc., the Beijing-based real-name social media website owner, sank 4.1 percent to $3.02, the lowest on record.
Vipshop Holdings Ltd., an online discounter of branded fashion, sank 3 percent to a two-week low of $22.65, paring its advance in 2013 to 27 percent. The Guangzhou-based company posted a fourth-quarter net income of $6.3 million after the close of U.S. trading, following a net loss of $63.5 million a year earlier. Sales for the three months almost tripled to $299.6 million. Vipshop also said it plans a secondary offering of as much as $120 million of shares.
Qihoo, owner of China’s most-used web browser, based in Beijing, slumped 4.7 percent to $31.13, the biggest slide since Dec. 5. The company is scheduled to release earnings for the three months through December on March 5.
The Hang Seng China Enterprises Index slid 2.2 percent to 11,426.22 yesterday, erasing its gains this year, while the Shanghai Composite Index of domestic Chinese shares dropped 3 percent to 2,325.95, the steepest retreat since November 2011.
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