SouFun Tops ADR Plunge on New Property Measures: China Overnight
Chinese equities fell in New York for the first time in a week, led by property companies, on concern government steps to intensify a three-year effort to tame the real estate market will damp an economic rebound.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. sank 1.5 percent to 92.63 at 1:35 p.m., the lowest level in three months. SouFun Holdings Ltd. (SFUN), the nation’s biggest real estate information website, tumbled the most since May, and E-House China Holdings Ltd. (EJ) extended a five-week drop. Suntech Power Holdings Co. slid after appointing a new chairwoman. Security software company NQ Mobile Inc. jumped 18 percent on a partnership with America Movil SAB.
The China-US gauge’s retreat followed the Shanghai Stock Exchange Property Index’s biggest decline since June 2008 as the Cabinet ordered more measures to cool real estate prices and after growth in the nation’s services industries slowed. China’s legislature will start its annual meeting today to set economic goals and elect new government leaders after the world’s second- largest economy emerged from its seven-quarter slowdown in the last three months of 2012.
“The property market is key to sentiment, so it’s important for the government not to create the idea among the public that they’re cracking down on property,” Christopher Palmer, who oversees about $2.5 billion as the London-based director of global emerging markets at Henderson Global Investors Ltd., said by phone yesterday. “If the market becomes unstable or property developers’ access to loans is cut off, they could have negative impact on the economy.”
The iShares FTSE China 25 Index Fund (FXI), the largest Chinese exchange-traded fund in the U.S., sank 2.5 percent to $37.64, set for the lowest close since Dec. 4. The Standard & Poor’s 500 Index (SPX) fell 0.3 percent to 1,514.27.
The Hang Seng China Enterprises Index (HSCEI) lost 2.1 percent to 11,104.65 yesterday, the largest slump in a week, while the Shanghai Composite Index of domestic Chinese shares tumbled 3.7 percent to 2,273.40, sinking the most since August 2011.
SouFun’s American depositary receipts tumbled 7.8 percent to $23.65, poised for the biggest slump since May 11. E-House slipped 2 percent to $4.34, set for the lowest level in two months.
Details on the property measures are “slightly stronger than expected and sooner than expected,” Matthew Sutherland, Senior Investment Director for Equities at Fidelity Worldwide Investment, said in an e-mailed statement yesterday. “We are at the start of a tightening cycle which will make it hard for the property sector to outperform.”
Suntech, the world’s biggest solar-panel maker, slumped 5.7 percent to $1.23, after losing 10 percent last week.
The company, based in Wuxi of Jiangsu province, said yesterday Susan Wang, a director at Suntech since April 2009, was appointed chairwoman of the board, replacing Zhengrong Shi. Shi, who was also chief executive officer until August, will remain as a director.
ADRs of Yingli Green Energy Holding Co., the world’s biggest silicon-based solar panel maker by capacity, sank for a sixth straight day, losing 1.7 percent to $2.36, the lowest level this year.
The company, based in Baoding of China’s Hebei province, reported fourth-quarter loss of $1.28 per ADR, more than the average 57-cent loss predicted by nine analysts compiled by Bloomberg. Shipments last year surged 43 percent from 2011 to 2.3 gigawatts, boosting revenue by 13 percent to 2.9 billion yuan ($470 million), Yingli said in a statement yesterday.
NQ Mobile Inc. (NQ), a Beijing-based mobile security software developer, surged 18 percent to $8.14, the biggest jump on record based on closing levels.
America Movil SAB, the world’s third-largest mobile network operator, will offer three of NQ’s mobile security applications to the carrier’s 262 million subscribers in 18 countries, NQ said in a statement yesterday. The services will start from Mexico through its Telcel unit with about 68 million subscribers, NQ said.
The deal with America Movil, which is controlled by billionaire Carlos Slim, is “much more significant to NQ in terms of size” than its previous partnership with other operators, Andy Yeung, an analyst at Oppenheimer & Co. in New York who rates NQ the equivalent of buy, said by phone yesterday. “It also opens a new revenue source for NQ, whose sales mainly came from application downloads and from phone manufacturers previously.”
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