Chinese stocks traded in the U.S. rose, led by Renren Inc. (RENN:US) and China Eastern Airlines Corp. (670), as the second manufacturing report this week signaled a rebound in output for the world’s biggest exporter.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. rose 0.2 percent to 104.86 in New York. Renren, a Chinese social networking website, jumped for a second day as Facebook Inc. plans to begin marketing its initial public offering, according to a person familiar with the matter. China Eastern rose after saying it would buy 20 Boeing Co. (BA:US) planes.
The purchasing managers’ index in China, where the economy grew at the slowest pace in four years last quarter, rose to 49.3 last month, according to data from HSBC Holdings Plc and Markit Economics, compared with an initial 49.1 reported on April 23. A separate index released on May 1 in Beijing by China’s statistics bureau indicated the quickest growth in a year, while U.S. factory output climbed at the fastest pace in 10 months, another report showed.
“Industrial production has been better than expected and U.S. growth has also picked up, which is good for China,” Gabriel Wallach, who manages $2.5 billion in global assets as chief investment officer at BNP Paribas Investment Partners in Boston, said in a phone interview. “Those trends have been positive” for Internet and consumer stocks, he said.
Wallach’s Equity World Emerging (FOEQWEI) fund has gained 16 percent in 2012 compared to the MSCI World Index (MXWO) which has advanced 9.2 percent.
Melco Crown Entertainment Ltd. (MPEL:US) dropped after a report showed revenue for Macau’s gaming industry grew at the slowest pace in more than two years in April and Wynn Macau Ltd. (1128), a unit of billionaire Steve Wynn’s Las Vegas company, won a land grant for its second resort in the Chinese city.
April revenue in Macau rose 22 percent in April from a year earlier to 25 billion patacas ($3.1 billion), after rising 24 percent in March, the Gaming Inspection and Coordination Bureau said yesterday.
“We are seeing a clear deceleration trend,” said Michael Turner, an analyst at Compass Point Research & Trading LLC., who has a sell recommendation. “Growth in Macau is closely tracking property value. Any time you have a correction in the property market, it will flow through the credit system and impact the spending.”
Shares of Melco’s ADRs have more than tripled over the past two years as gamblers from China’s mainland drive up revenue for casino operators in Macau, the world’s biggest gaming hub and the only place in the nation where casinos are legal.
Melco declined 2.8 percent to $15.15. Wynn Macau, traded in Hong Kong, was unchanged yesterday at HK$24.90 ($3.21).
‘Hope Among Investors’
Renren gained 4.3 percent to $6.60, extending its two-day advance to 8.2 percent, the most since April 13. Renren is benefiting from investor speculation that the Beijing-based social networking site may partner with Facebook in China, said Echo He, a New York-based analyst who covers Chinese Internet stocks for Maxim Group LLC.
“There’s hope among some retail investors that Renren will be acquired or get an investment from Facebook,” He said in a phone interview. “Many investors trade on Internet names and Facebook beginning a road show leads them to Renren. People think of Renren as China’s Facebook.”
Maxim’s He has a sell rating (RENN:US) on Renren.
China Eastern (CEA:US), the nation’s second-biggest carrier, gained 2.7 percent in New York to $16.90 after shares rose 3.1 percent in Hong Kong. The Shanghai-based company said (CEA:US) April 30 that it plans to buy 20 Boeing B777-300ERs for about $5.94 billion.
LDK Solar Co. (LDK:US), the world’s second-largest maker of wafers, tumbled 7.1 percent to $2.87, its lowest close in New York since Nov. 21. LDK has dropped 9.7 percent since it reported an operating margin of minus 126.5 percent and a gross margin of minus 65.5 percent due to a “significant” drop in prices, according to the statement released April 30. Margins, a measure of profitability, were positive a year ago.
The iShares FTSE China 25 Index Fund (FXI:US), the biggest Chinese exchange-traded fund in the U.S., fell 0.1 percent to $38.31. The Standard & Poor’s 500 Index (SPX) slid 0.2 percent to 1,402.31 as data showed companies added fewer jobs than economists projected and euro-region unemployment rose to a 15-year high.
U.S. companies added 119,000 workers in April, the fewest in seven months, according to figures from Roseland, New Jersey- based ADP Employer Services. The median forecast of economists surveyed by Bloomberg News called for a 170,000 advance. Joblessness in the 17-nation euro area increased to 10.9 percent in March, the highest since April 1997, from 10.8 percent a month earlier.
The Shanghai Composite Index (SHCOMP) gained 1.8 percent yesterday to 2,438.44 after being closed for two days because of holidays. The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong added 0.6 percent to a six-week high of 11,145.96.
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