Already a Bloomberg.com user?
Sign in with the same account.
Spreadtrum Communications Inc
China Eastern Airlines Corp Ltd
iShares FTSE China 25 Index Fund
Franklin Covey Co
E-Commerce China Dangdang Inc
Chinese equities rose the most in a week in New York trading after more cities in the world’s second-largest economy rolled out measures to bolster growth.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S. gained 1.9 percent to 85.94 in New York yesterday. Spreadtrum Communications Inc. (SPRD), a chipmaker for mobile devices which counts HTC Corp. (2498) as a customer, jumped the most in seven weeks after Morgan Stanley raised its recommendation. China Eastern Airlines Corp. (CEA) traded at the biggest premium to Hong Kong shares in seven weeks as the nation said it will expand a tax incentive program.
Changsha, the capital of Hunan province, unveiled an 829.2 billion yuan ($130 billion) investment plan, China News Service reported yesterday. The report follows plans announced by the cities of Nanjing and Ningbo over the past two weeks to introduce measures to boost consumption. China will expand a trial tax program to transportation and service businesses in 10 more provinces and cities beginning Aug. 1 after testing it in Shanghai, the cabinet said in a July 25 statement.
“Investors are more excited about riskier assets today because of the Chinese announcements about spending,” Derrick Irwin, who helps manage $2.5 billion in the Wells Fargo Advantage Emerging Markets Equity Fund, said in an interview from Boston yesterday. “These types of actions, while perhaps not as broad brushed, are still done with the intent of driving investment-led growth.”
The iShares FTSE China 25 Index Fund (FXI), the biggest Chinese exchange-traded fund in the U.S., climbed 1.7 percent to $33.24, extending a two-day rally. The Standard & Poor’s 500 Index (SPX) advanced 1.7 percent, the most in two weeks, to 1,360.02, as European Central Bank President Mario Draghi pledged to defend the euro while U.S. jobless claims fell and durable-goods orders rose.
Local Chinese governments are stepping up efforts to stimulate their regional economies after the country’s gross domestic product fell to a three-year low in the second quarter while growth in industrial production and retail sales slowed in June. China’s GDP expanded 7.6 percent last quarter from a year earlier, the National Bureau of Statistics said on July 13.
Premier Wen Jiabao reiterated his call made earlier this month that the government enact structural tax changes to stanch a six-quarter slowdown in the economy. The shift to a value- added tax may save Chinese companies 90 billion yuan ($14 billion) in tax payments this year, Zhu Jianfang, an economist with Citic Securities Co. in Beijing, said in a note yesterday.
American depositary receipts of Shanghai-based Spreadtrum gained 5.3 percent to $18.62, the most since June 6, as Morgan Stanley raised its recommendation to overweight from equal- weight and increased its 12-month price target by 31 percent to $24.
Spreadtrum will benefit from China’s “booming” low-end smartphone market and increased margins in its sales of feature- and smartphones, Bill Lu, an analyst at Morgan Stanley in Hong Kong, wrote in an e-mailed report yesterday.
Shanghai-based China Eastern, the country’s second-largest carrier, jumped 4.6 percent to $17.24, trading at a 0.9 percent premium to its Hong Kong shares, the highest since June 7. China Southern Airlines Co. (1055), the nation’s biggest carrier by passengers, rose the most in two weeks as the Guangzhou-based company said it will fly its Airbus SAS A380s double-deckers on the Guangzhou-Los Angeles route starting in October. China Southern added 4 percent to $24.65.
Renren Inc. (RENN), the Chinese social networking website, tumbled 5.1 percent to $3.90, the lowest since Jan. 13, as Zynga Inc. (ZNGA), the biggest developer of games played on Facebook Inc. (FC)’s social (FB) network, missed analysts’ second-quarter revenue and profit estimates. Facebook, the world’s most popular social-networking site, posted a narrower profit margin as sales and marketing costs surged, a sign that the company is chasing growth through higher spending. Shares slid in late trading.
E-Commerce China Dangdang Inc. (DANG), China’s biggest online book retailer, fell for a second day, losing 3.7 percent to $4.93 as Chief Executive Officer Li Guoqing said the Beijing-based company will probably sell its new electronic reader at a loss in a bid to boost content sales. Li spoke in an e-mail interview yesterday.
The Hang Seng China Enterprises Index (HSCEI) of Chinese companies traded in Hong Kong slipped 0.1 percent to a two-week low of 9,210.92. The Shanghai Composite Index (SHCOMP) fell 0.5 percent yesterday to 2,126.00.
To contact the reporters on this story: Belinda Cao in New York at firstname.lastname@example.org; Leon Lazaroff in New York at email@example.com
To contact the editor responsible for this story: Tal Barak Harif at firstname.lastname@example.org