Chinese ADRs End Five-Day Decline in U.S. as Tech Shares Rallyby
U.S.-traded Chinese equities gained for the first time in six days and the biggest U.S. exchange-traded fund tracking mainland stocks jumped as President Xi Jinping met with U.S. leaders and his government said it will encourage private investment in state-owned enterprises.
Online retailers JD.com Inc. and Vipshop Holdings Ltd. contributed the most to a 0.9 percent gain in the Bloomberg China-U.S. Equity Index. Momo Inc., the maker of a chat app used for casual dating, rallied 9.9 percent to $12.04, a four-week high. Shanda Games Ltd. slumped 0.8 percent after the online game developer said it agreed to amend terms in its going-private buyout offer. The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF increased 0.5 percent to $32.70, ending a two-day decline.
Chinese technology stocks in the U.S. followed a rally in their mainland-traded counterparts amid speculation Xi’s visit with American business and government leaders will help boost trade. The president has met with the heads of companies including Honeywell International Inc. and Apple Inc. After the close of Shanghai trading, the State Council released guidelines on mixed-ownership reforms and said it will encourage mutual investments by state enterprises and private companies.
JD.com increased 3.9 percent to $25.34. Vipshop jumped 2.8 percent to $16.79. Ctrip.com International Ltd., the online travel website, rose 2.6 percent to $66.70. Video website operator Youku Tudou Inc. gained 2.6 percent to $16.44. Nine of the 10 stocks contributing the most to Thursday’s gain in the Bloomberg index of U.S.-traded Chinese equities were e-commerce or technology companies.
Shanda retreated to $6.66. Trading volume of 966,000 shares was 2.8 times the daily average of the past three months. Under restated terms of a $1.9 billion buyout offer announced in April, Shanda would merge with a unit of Capitalcorp Ltd. and continue as a wholly owned subsidiary, the company said in a statement. The stock has risen 2.6 percent since the buyout proposal was made public, pushing its market value to $1.8 billion.