Chinese equities fell in New York for the first time in three days, led by China Petroleum and Chemical Corp. (SNP:US) and Huaneng (HNP:US) Power International Inc., after slower growth in industrial output and exports damped prospects for expansion in the world’s largest developing economy.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. slid 0.9 percent to 89.37 yesterday, after rising 0.5 percent last week. China Petroleum, Asia’s biggest oil refiner, slumped for a fifth day as its units announced plans to issue shares to existing holders. Huaneng (902) tumbled to the lowest level since March, while Semiconductor Manufacturing International Corp. (981) slid to a one-month low after Credit Suisse Group AG cut its rating.
China’s industrial production rose a less-than-forecast 9.2 percent in May from a year earlier and factory-gate prices dropped for a 15th month, according to government data released over the weekend. Exports rose at the slowest pace in 10 months, imports declined and new yuan loans shrank, signaling weaker global and domestic demand after first-quarter expansion unexpectedly slowed.
“The data is disappointing in that it really doesn’t show a rebound commensurate with all the credit that was extended,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP in London, said by e-mail. “May credit data shows a substantial drop off. Stocks of state-owned companies and banks will be impacted.”
The iShares FTSE China 25 Index Fund (FXI:US), the largest Chinese exchange-traded fund (FXI:US) in the U.S., fell 0.9 percent in New York to $35.35. The Standard and Poor’s 500 Index closed little changed at 1,642.81, as investors weighed S&P’s move to boost its outlook for America.
China’s May industrial production compared with a median estimate for a 9.4 percent increase, with growth the weakest for a January-May period since 2009. Fixed-asset investment excluding rural areas rose 20.4 percent in the first five months from a year earlier, down from a 20.6 percent pace in January-April, China’s statistics bureau data showed. Retail sales growth of 12.9 percent in May matched the median projection of analysts.
American depositary receipts of Beijing-based China Petroleum, known as Sinopec (SNP:US), dropped 4.1 percent in New York to $95.26, the lowest price since October, in its fifth day of declines.
Sinopec units Sinopec Shanghai Petrochemical Co. and Sinopec Yizheng Chemical Fibre Co. plan to increase their tradable A-shares, the companies said in filings to Hong Kong Stock Exchange June 7.
Huaneng, China’s biggest electricity producer, lost 4.8 percent to $39.06, the lowest price since March 15. The ADRs still traded at a 0.4 percent premium over its Hong Kong shares, the highest in two weeks. Each ADR represents 40 underlying shares in the Beijing-based company.
Semiconductor, a circuit foundry based in Shanghai and known as SMIC, slid 2 percent to $3.96, the lowest level in a month.
Credit Suisse analyst Randy Abrams cut the rating on SMIC to neutral, equivalent to hold, from outperform yesterday, saying the company’s upcoming investment cycle will curb earnings.
Cnooc Ltd. (883), the biggest offshore oil explorer in China, fell 1 percent to a one-week low of $173.87. Jefferies Group analysts recommended in a note yesterday investors sell Cnooc, citing earnings estimates, and buy PetroChina Co., the nation’s biggest oil company.
Chinese Premier Li Keqiang said the nation’s economy is being affected by more “complicated factors” while growth rate remains in a “relatively high and reasonable” zone, according to comments published on the government’s website June 8.
Analysts are paring gross domestic product growth estimates for China. A Bloomberg News survey last month showed a median projection of 7.8 percent for the year, down from an 8 percent pace forecast in April.
Li’s remarks signal there won’t be any further stimulus to grow the economy, Amiya Capital’s Wang said. “It does pose downside risk to consensus GDP forecasts for the second half should policy makers continue to pursue a tighter credit policy.”
Suntech Power Holdings Co., the world’s biggest solar-panel maker in 2011, jumped 15 percent to $1.04 in New York, leading a rally among solar manufacturers. It had the biggest gain on the China-U.S. gauge.
LightInTheBox Holding Co., which raised $78.9 million in its U.S. initial public offering last week, extended its third day of gains, surging 16 percent to $14.59, compared with its IPO price of $9.5 per ADR.
The Hang Seng China Enterprises Index (HSCEI) slipped 0.6 percent to 10,126.97, as a nine-day decline sent the gauge to the lowest level since October. The Shanghai Composite dropped 1.4 percent to a one-month low of 2,210.90 on June 7. The market is closed for a public holiday and will reopen June 13.
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