Chinese equities traded in the U.S. surged on speculation policy makers will implement more measures to stem a slowdown in Asia’s biggest economy. Qihoo 360 Technology Co. climbed from a five-month low.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in New York added 1.3 percent to 91.76 yesterday. Qihoo jumped 5.1 percent after the security software developer denied a report that user traffic on its website is lower than reported. LDK Solar Co. (LDK:US) led gains in solar makers as the government quadrupled an installation goal for sun-derived energy projects. China Southern Airlines Co. rose to a seven- week high after the Shanghai Securities News said regulators cut jet fuel prices.
Reducing lenders’ reserve requirements may become the top option for the central bank to boost liquidity in the banking system, the state-owned China Securities Journal said in a front-page commentary yesterday. Policy makers cut the benchmark interest rates on June 7 for the first time since 2008 to spur growth as the economy expanded at the slowest pace in 11 quarters in the first three months this year. The China-US Index sank to an eight-month low during the second quarter.
“We’ll certainly see additional policy, a combination of monetary and fiscal stimulus from China, as the growth rate declines,” Kevin Carter, chief executive officer of Baochuan Capital Management LLC in Walnut Creek, California, said yesterday by phone. “Chinese stocks have already priced in a slowdown and investors, by and large, are underexposed.”
China ETF Jumps
The iShares FTSE China 25 Index Fund (FXI:US), the biggest Chinese exchange-traded fund in the U.S., increased 1.6 percent to a two-week high of $34.20. The Shanghai Composite Index (SHCOMP) of mainland stocks added 0.1 percent to 2,229.19. The Standard & Poor’s 500 Index of U.S. shares rose 0.6 percent to a two-month high of 1,374.02 after data showed factory orders topped estimates.
Chinese central bank may cut reserve-requirement ratio for banks three more times in 2012, each by 0.5 percentage point, the Shanghai Securities News reported on its website, citing a report by the China Banking Association released yesterday.
Qihoo (QIHU:US), a Beijing-based technology company which also develops computer desktop software, increased 5.1 percent to $16.82, the biggest jump in two weeks.
The company’s American depositary receipts tumbled 7.5 percent on July 2 after Anonymous Analytics said in a report Qihoo had been “lying” to investors about its traffic volume, citing data from Reston, Virgina-based ComScore Inc. (SCOR:US)
‘Inaccurate and Misleading’
Qihoo said the data quoted in Analytics’ report is “inaccurate and misleading” and it will continue to work with ComScore to enhance data tracking and “eventually to provide accurate and reliable third-party traffic data to investors and public in the near future,” according to a statement distributed by PRNewswire statement yesterday.
“We haven’t officially released the data as some technical issues remain to be solved for applying ComScore’s system in China” including compatibility and security, Alex Xu, Qihoo’s chief financial officer said in a phone interview from Beijing yesterday.
LDK, the world’s second-largest maker of wafers, surged 7 percent to a one-week high of $1.99. Yingli Green Energy Holding Co., the sixth-largest silicon-based solar module producer, climbed 6.1 percent to $2.96. Suntech Power Holdings Co., the world’s largest solar-panel maker based in Wuxi in Jiangsu province, advanced 4.2 percent to $1.99.
China, the biggest supplier of solar power panels, quadrupled a domestic installation goal for sun-derived energy projects to 21 gigawatts by 2015 to help absorb excess supply of panels and to support prices. Shi Lishan, deputy director of the administration’s renewable energy division, said the plan will be issued “soon” in a phone interview July 2.
“The solar sector will benefit should China increase its installation capacity, and the news seemed to boost the stocks,” Aaron Chew, a New York-based analyst at the Maxim Group LLC, said by phone yesterday.
ADRs of Guangzhou-based China Southern, Asia’s largest airline by fleet size, increased 4 percent to $22.79, the highest level since May 11. China Eastern Airlines Corp., the second-biggest domestic carrier based in Shanghai, climbed 1.1 percent to a three-week high of $16.12.
China cut jet fuel prices by 741 yuan ($117) to 6,768 yuan a ton in July, the Shanghai Securities News said yesterday, citing a decision from the National Development and Reform Commission, the top planning agency.
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