NetEase Drops as Buyout Bid Fuels Ambow: China OvernightBelinda Cao
Chinese equities sank to the lowest level since November in New York, led by NetEase Inc., after the nation’s new leaders failed to announce specific policy measures to stoke growth in Asia’s largest economy.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. slid 0.8 percent to 91.95 by 12:52 p.m., posting a 3.3 percent slump in the week, the most in five weeks. NetEase slid the most since December after Chinese state television said the Internet company collects users’ private information. Aluminum Corp. of China declined after JPMorgan Chase & Co. recommended avoiding the stock. Ambow Education Holding Ltd. surged 21 percent after receiving a buyout offer.
China’s legislature named Xi Jinping the nation’s new President and Li Keqiang premier this week at its annual meeting to end March 17. While the nation emerged from a seven-quarter slowdown at the end of 2012, the new leaders face manufacturing expanding at the slowest pace in five months and quickening inflation. The central government tightened housing market restrictions March 1 to curb rising prices.
“Beijing didn’t announce anything that the market was looking forward to,” Michael Ding, lead manager of the China Region Fund at U.S. Global Investors Inc. in San Antonio, Texas, which oversees $2.2 billion, said by e-mail. “The January to February numbers disappointed, with inflation exceeding estimates. Market speculation is taking over for the short term.”
The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., declined 0.6 percent to $37.52 in New York, losing 4 percent in the week. The Standard & Poor’s 500 Index dropped less than 0.1 percent to 1,562.79, paring its third weekly advance to 0.8 percent.
The Hang Seng China Enterprises Index sank 0.7 percent to 11,020.89 yesterday, bringing its weekly loss to 4 percent. The Shanghai Composite Index of domestic Chinese shares advanced 0.4 percent to 2,278.40, trimming its decline for the week to 1.7 percent, the second consecutive weekly slump.