Bloomberg News

Energy Stocks in N.Y. Buck Hong Kong Plunge: China Overnight

December 10, 2011

Dec. 10 (Bloomberg) -- Chinese stocks traded in the U.S. rose for the first day in four as European efforts to stem the region’s debt crisis boosted energy and materials companies to a premium over Hong Kong shares.

The Bloomberg China-US 55 Index of the most-traded Chinese stocks rebounded 1.1 percent at 1:16 p.m. in New York after falling 2.3 percent this week through yesterday. Yanzhou Coal Mining Co., China’s fourth-largest producer of the fuel, led energy company gains, adding 3.7 percent to a 4 cent premium in the U.S. Cnooc Ltd., the nation’s largest offshore oil producer, gained 1.6 percent to $193.05, a 3 cent premium.

European leaders meeting in Brussels expanded a bailout fund and agreed to a closer fiscal union to fight the crisis. German Chancellor Angela Merkel said the deal puts Europe on the path toward a “lastingly stable euro.” U.S. stocks headed to a second week of gains after the agreement.

“Investors must think that if there’s a chance that Europe can fix itself, and we get out of this extended period of stagnation, what would growing economies need?” said Richard Kang, chief investment officer at Emerging Global Advisors in New York, which manages an exchange-traded fund focused on developing-market energy companies. “If you are in the business of widget making, whether you are making cars or whatever, you need steel, you need copper and you need oil if you are going to ramp up.”

The Hang Seng China Enterprises Index, which tracks Chinese companies listed in Hong Kong, fell the most in a month, losing 3.2 percent. The Shanghai Composite Index of domestic shares reached the lowest level since March 2009 after dropping 0.6 percent.

Industrial Production

The stock measures fell as Chinese industrial output increased at the slowest pace in November since August 2009. Production rose 12.4 percent, lower than the median forecast of economists surveyed by Bloomberg. Inflation cooled for a fourth month as consumer prices rose 4.2 percent, lower than all estimates in a Bloomberg survey of 35 economists.

Citigroup Inc. said a slowdown in China’s domestic consumption and overseas demand has been “faster than expected” this quarter. The brokerage cited feedback from retailers and manufacturers at a Hong Kong conference.

Chinese materials companies in the U.S. rose 2.8 percent, the best performance among nine industry groups.

Yanzhou Coal led energy stocks higher, cutting its losses for the week to 2.3 percent. The American depositary receipts, which represent 10 ordinary shares, climbed to $23.07, while the Hong Kong shares declined to HK$ 17.58, the equivalent of $2.26.

Cnooc, PetroChina

Cnooc ADRs, which are worth 100 ordinary shares, rose 1.6 percent to $193.05 and are set for a second weekly gain. The Hong Kong Shares slid to HK$ 14.78, or the equivalent of $1.90. One hundred Hong Kong shares cost about $3.05 less than the U.S. equivalent. PetroChina Co., the country’s second-largest oil refiner, rose 0.4 percent to $124.54, which is a 3 cent premium to the Hong Kong-traded shares.

Aluminum Corporation of China Ltd., the nation’s biggest aluminum-maker, rose 2.8 percent to $11.89, paring its yearly decline to 48 percent. It surged the most among materials companies in the China-US index.

E-Commerce China Dangdang Inc. gave back part of yesterday’s 20 percent surge, falling 6.8 percent, the most among companies in the Bloomberg measure. China’s largest online bookseller’s plan to introduce an e-book platform will have a “minimal” effect on the company’s 2012 results, Adam Krejcik, an analyst at Roth Capital Partners, wrote in a Dec. 9 research note.

Real-Estate Rebound

SoFun Holdings Ltd., which offers online real-estate listings, added 2 percent. China’s November housing transactions rose 12 percent, rebounding from a decline in October.

The IShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., increased 2 percent to $36.40.

The Chinese yuan was little changed at 6.3647 per dollar in Shanghai, according to the China Foreign Exchange Trade System. The yuan has advanced 3.8 percent this year, the best performance among Asia’s 10 most-traded currencies excluding the yen.

China will maintain a “prudent” monetary policy and a “proactive” fiscal policy next year, the official Xinhua news agency reported Dec. 9, citing a meeting of the Communist Party’s Politburo chaired by President Hu Jintao. China will “preset or fine tune policies in light of changes in economic development,” Xinhua reported.

--Editors: Richard Richtmyer, Lester Pimentel

To contact the reporters on this story: Zachary Tracer in New York at Ztracer1@bloomberg.net; Ye Xie in New York at yxie6@bloomberg.net;

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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