Bloomberg News

Sina Rises as Yanzhou Jumps in U.S. on Purchase: China Overnight

December 24, 2011

Dec. 24 (Bloomberg) -- Sina Corp., the owner of the Twitter-like Weibo service in China, led gains in the nation’s U.S.-traded Internet stocks after a report said Russia’s Digital Sky Technologies invested $200 million in the company.

The Bloomberg China-US 55 Index of the most-actively traded Chinese equities rose 0.9 percent yesterday to 95.80. Sina advanced 4.1 percent to $55.79. Yanzhou Coal Mining Co., China’s fourth-biggest coal producer, surged 7.2 percent, the most since Oct. 27, after saying it agreed to buy Australia’s Gloucester Coal Ltd. for A$2.1 billion ($2.1 billion) in cash and shares.

Sina, also the owner of China’s third-most visited website, jumped as much as 6.4 percent yesterday. Digital Sky injected $200 million into Sina’s Weibo service by converting bonds into Sina’s shares at $65 each, China Knowledge reported Dec. 23, citing an unidentified person familiar with the matter. A call and e-mail to Cathy Peng, Sina’s spokeswoman, weren’t immediately returned outside of normal business hours.

Use of the Weibo service has been stable since early October, when traffic dipped because of a holiday, Connie Gu, an analyst at Bocom International Holdings Ltd. said in a Dec. 23 report. China’s mandate for users to register their real names on microblogs, which began this month, “is positive for microblogs’ future development as the new requirement should reduce irresponsible or false messages,” she wrote.

More Chinese cities including Guangzhou and Shenzhen are requiring new users of microblogging services to register with real names, Xinhua News Agency reported Dec. 22, citing local authorities. A similar regulation was imposed by Beijing and Shanghai earlier this month.

U.S., China Benchmarks

The Standard & Poor’s 500 Index advanced 0.9 percent to 1,265.33 yesterday. The Shanghai Composite Index climbed 0.8 percent to 2,204.78.

Yanzhou’s American depositary receipts gained 3 percent last week to $21.47, following a three-day trading suspension because of the deal to buy Gloucester.

The transaction values Sydney-based Gloucester at as much as A$10.16 a share, subject to conditions, according to a statement from the Australian company. The purchase will almost double Yanzhou’s coal mines in Australia, the world’s biggest exporter, as well as expand its access to ports.

Karen Li, a Hong-Kong based analyst at CCB International Holding Ltd. raised her recommendation on Yanzhou to “neutral” from “underperform” after the purchase, maintaining a 12-month price target of HK$15.40 ($1.98).

AsiaInfo-Linkage Inc., a Beijing-based telecommunications software provider, leaped 7.2 percent to $7.57, the most in six weeks.

The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., remained at $35.31. The Chinese yuan was little changed at 6.3364 a dollar, according to the China Foreign Exchange Trade System.

--Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

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


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