Yingli Leads Solars on State Support: China Overnight

Solar manufacturers led gains among Chinese companies traded in New York after Premier Li Keqiang pledged measures to boost demand and provide financing support.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. jumped 1.9 percent to 88.08 yesterday, the biggest gain in two months. Yingli Green Energy Holding Co., the world’s largest solar-panel maker, surged 13 percent and LDK Solar Co. rallied. Qihoo 360 Technology Co. climbed to a record high while Cnooc Ltd. rebounded the most in 11 months. Non-deliverable yuan forwards strengthened the most since August 2011.

The Bloomberg Industries Large Solar Index, which tracks 17 solar energy companies, soared 5.1 percent as Germany’s Solarworld AG to Yingli surged. China’s government said June 14 that power grids should give priority access to solar energy while lenders need to offer financing help. It also vowed to encourage mergers and acquisitions among solar companies. The nation is drafting a plan to use renewable energy for heating, according to Shanghai Securities News.

“That’s a lot more focus on cleaner air and they are trying to reduce the growth of coal in favor of cleaner resources,” David Smith, the manager of the Gabelli Green Fund at Gamco Investors Inc., said in an telephone interview from Purchase, New York. “The government is likely to encourage more consolidation in the industry. Prices on solar cells and modules have been improving.”

ETF Jumps

The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund in the U.S., climbed 1.5 percent to $34.48, the biggest rally in two weeks. Puts protecting against a 10 percent drop in the ETF cost 4.3 points more than calls betting on a 10 percent increase last week, according to three-month option data compiled by Bloomberg. That’s the highest since April 17. The gap narrowed to 4 points yesterday.

American depositary receipts of Yingli, based in Baoding in China’s Hebei province, surged to $3.25 in New York, the steepest jump since May 21.

The company’s affiliate Yingli Group Co., controlled by Chairman and Chief Executive Officer Liansheng Miao, signed strategic cooperation agreements with local governments in Yunnan Province on June 13 for the construction of a 3-gigawatt photovoltaic power plant that will begin this year, according to a statement on the group’s website.

China may introduce new policies on solar power subsidy as early as this month, China Securities Journal reported, citing unidentified people.

Qihoo Climbs

LDK, based in Xinyu of Jiangxi province, advanced 4.4 percent to $1.42, gaining the most in a week. Trina Solar Ltd., based in Changzhou, surged 5.1 percent to $6.23, the highest price since May 28. Suntech Power Holdings Ltd., the world’s biggest solar-panel maker in 2011, jumped 4.1 percent to $1.

Qihoo, a software developer that owns China’s most-used browser and second-biggest search engine, soared 8.8 percent to $47.48, the highest level since its U.S. public offering in March 2011.

Beijing-based Qihoo has the best chance among all competitors seeking to acquire Sogou, a web search engine owned by Sohu.com Inc., 86Research Ltd. said in a note to clients yesterday.

Cnooc, the nation’s biggest offshore oil explorer, advanced 4.2 percent to $173.89, soaring the most since July 2012.

Australia awarded new offshore oil exploration permits to companies including Cnooc, according to a statement on Australian Energy Minister Gary Gray’s website.

Yuan Gains

Twelve-month yuan forwards strengthened 0.94 percent versus the dollar to 6.2105 yesterday in New York, rising the most since August 11, 2011, data compiled by Bloomberg showed. The currency gained 0.1 percent to 6.1250 yesterday in Shanghai, after China’s central bank set the reference rate at a record high of 6.1598. The yuan is allowed to trade a maximum 1 percent either side of the fixing rate.

The government is scheduled to release property prices for May and foreign direct investment data today.

The Standard and Poor’s 500 Index advanced 0.8 percent to 1,639.04, after falling 1 percent last week. The Hang Seng China Enterprises Index in Hong Kong climbed 0.8 percent to 9,744.48, halting a 12-day decline that was the longest since 1993, while the Shanghai Composite Index slipped 0.3 percent to 2,156.22 after dropping 2.2 percent last week.

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