Nov. 30 (Bloomberg) -- Chinese equities traded in the U.S. fell, swelling the benchmark index’s monthly decline, as reports from Goldman Sachs Group Inc. and the Organization for Economic Cooperation and Development added to concern that growth in the world’s second-largest economy is slowing.
The Bloomberg China-US 55 Index slid 0.8 percent to 96.48 at the close of trading in New York, and is down 3.3 percent this month. Solar companies from Suntech Power Holdings Co. to Trina Solar Ltd. fell after a research group said the industry needs to consolidate. Focus Media Holdings Ltd. reversed losses after Muddy Waters LLC’s Carson Block said on CNBC it doesn’t have a “full picture” of the digital advertising company.
Goldman analysts said yesterday clients should end a bet that Hong Kong-listed companies in China will gain as economists cut growth forecasts for the country. Property risks are “overshadowing” China’s economic outlook, the OECD said in a report yesterday. Doubts about the survival of Europe’s monetary union are the main risk to the world economy, it said.
“The Chinese household has never faced a decline in property prices of any great significance or extent in terms of time,” Michael Spencer, the Hong Kong-based chief economist for Asia at Deutsche Bank AG, said in an interview with Bloomberg Television. “The worse things get internationally, the more likely we are to see some countries back into, at least temporarily, deflation.”
The Paris-based OECD said its 34 member nations will grow 1.9 percent this year and 1.6 percent in 2012, down from the 2.3 percent and 2.8 percent predicted in May, according to a report released yesterday.
China’s economy, the world’s second biggest, grew 9.1 percent in the third quarter from a year earlier. The expansion will slow to 8.5 percent next year, the OECD said, down from its May forecast of 9.2 percent. UBS AG predicts 8 percent growth in 2012, less than its previous call of 8.3 percent, and Citigroup Inc. cut its forecast to 8.4 percent from 8.7 percent.
Bank of America Corp., Goldman Sachs and Citigroup had long-term credit grades reduced to A- from A by Standard & Poor’s after the ratings firm revised criteria for dozens of the largest global lenders. S&P made the same cut to Morgan Stanley and Bank of America’s Merrill Lynch unit. JPMorgan Chase & Co. was reduced one level to A from A+.
S&P upgraded Bank of China Ltd. and China Construction Bank Corp. to A from A- and maintained the A rating on Industrial and Commercial Bank of China Ltd., giving all three lenders higher grades than most big U.S. banks.
Focus Media, based in Shanghai, increased 0.5 percent to $17.08 yesterday in New York. It fell as much as 10 percent earlier in the day after short-selling firm Muddy Waters sent an e-mail report saying its bearish view was reinforced by the company’s rebuttal of assertions that it overstates the size of its advertising network. Shares rebounded after Carson Block finished an interview with CNBC, where he said he didn’t have a full picture of Focus Media.
Focus’s shares plunged 39 percent on Nov. 21 after Muddy Waters issued its first report on the stock. The stock has gained 11 percent since.
The Standard & Poor’s 500 Index rose 0.2 percent to 1,195.19 as consumer confidence increased by the most since 2003 and European finance ministers discussed efforts to tame the debt crisis. The Shanghai Composite Index climbed 1.2 percent, the most in two weeks, on speculation the government will take measures to boost growth.
The Shanghai measure is trading at 11.4 times estimated earnings, compared with 13.9 for Indian stocks, 10 for Brazilian shares and 5.1 for Russian equities.
China’s domestic solar-panel manufacturers will be reduced to 15 within five years due to industry consolidation, Li Junfeng, deputy director general of the Beijing-based Energy Research Institute at the National Development and Reform Commission, said in a phone interview yesterday. There were 330 panel makers in China in 2008, according to the Chinese Renewable Energy Society, which said it stopped counting as it couldn’t keep up with the “multifold” increase since then.
Suntech, the world’s largest maker of solar panels, fell 6.6 percent to $2.25, taking its loss this month to 18 percent. Trina, China’s fifth-largest solar panel supplier, slid 3.4 percent to $6.91.
The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., slipped 0.9 percent to $34.29. The Chinese yuan strengthened 0.1 percent to 6.3778 a dollar, bringing its appreciation this year to 3.6 percent, according to the China Foreign Exchange Trade System.
Youku.com Inc., China’s largest online-video website, increased 4.2 percent in its third day of advances to $17.56. Renren Inc., a Beijing-based social networking website, jumped 4.7 percent, the first increase in a week, to $3.77.
China will ban television stations from airing commercials during broadcasts of dramas starting Jan. 1, the nation’s regulator of radio, film and television said Nov. 28. The restrictions add to actions the government has taken to increase control of TV and web content after the ruling Communist Party said last month it would promote “fine” TV programming and strengthen management of online social media sites.
While TV stations and advertising agencies are likely to suffer under the new ban, Internet companies could benefit from an accelerated shift of ad dollars from TV to online channels, said Andy Yeung, an analyst at Oppenheimer & Co. in New York in a note yesterday.
Sina Corp., the owner of China’s Twitter-like Weibo service, gained after Muddy Waters said it hasn’t done any research on Sina, following a Wall Street Journal report yesterday speculated on the short-selling company’s next target.
Sina’s shares advanced 4.9 percent to $62.67 after losing 5.4 percent in the previous day.
“It may take time for investors to return to being comfortable with being in Chinese equities,” Gene Munster, a senior analyst at Piper Jaffray & Co. said yesterday in a research report. “Sina has developed a platform in Weibo that will ultimately be the leading social platform in China. We remain confident in Sina’s corporate governance.”
Melco Crown Entertainment Ltd., the Macau casino operator, retreated 2.6 percent to $8.75. The company said after U.S trading closed yesterday that its shares will be listed on the Hong Kong Stock Exchange by way of introduction on Dec. 7. No new shares will be issued, it said in a regulatory filing.
--With assistance from Edmond Lococo and Feifei Shen in Beijing and Zhang Shidong in Shanghai. Editors: Marie-France Han, Brendan Walsh
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