Chinese equities advanced in New York as Suntech Power Holdings Co. (STP:US) climbed after a moratorium on claims from creditors was extended in Europe while online retailers rallied on an improving outlook for second-half sales.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. rose 0.5 percent to a one-week high of 88.50 yesterday. Suntech, whose China unit was forced into bankruptcy in March after defaulting on a bond payment, climbed to the highest close this month. Spreadtrum Communications Inc. (SPRD:US) gained for a fifth day while E-Commerce China Dangdang Inc. (DANG:US) reached the highest price in 13 months.
Suntech, once the world’s largest solar-panel maker, said its European unit has been granted a “definitive” six-month moratorium on debt repayment from judicial authorities in Switzerland. Premier Li Keqiang said China’s growth rate is in a “reasonable” range, China’s Central Television reported yesterday, while a Commerce Ministry spokesman said retail sales will improve in the second half after signs of recovery.
“Suntech equity at this point is an option if you believe the company will be able to effectively restructure in bankruptcy proceedings,” Chris Kettenman, Chief Energy Strategist at Prime Executions Inc. in New York, said by phone. “The Chinese government and banking parties have already made a clear investment in the space. It makes sense that the current government would want to offer support and encourage banks to be flexible in lending policies.”
The iShares FTSE China 25 Index Fund, the largest Chinese exchange-traded fund (FXI:US) in the U.S., climbed 0.2 percent to $34.56 in a second day of advances. The Standard & Poor’s 500 Index gained 0.8 percent to 1,651.81, the highest level this month, as investors awaited the outcome of a Federal Reserve policy meeting for clues to the central bank’s stimulus plans.
Suntech’s American depositary receipts jumped 5 percent to $1.05, the highest close since May 30.
The six-month moratorium granted in Shaffhausen, Switzerland to Suntech’s European unit may be extended again, the Wuxi-based company said yesterday. Suntech was given a two-month provisional moratorium in Europe on April 9.
Spreadtrum, a Shanghai-based mobile-chip designer, soared 4.8 percent to $22.98, the highest level since October.
Credit Suisse Group AG analyst Randy Abrams raised Spreadtrum’s earnings and sales estimates (SPRD:US) for the second quarter in a note June 17, after the company boosted its revenue forecasts (SPRD:US) last week. Abrams maintained an outperform rating, equivalent to buy, and a price target of $27.
Vipshop Holdings Ltd. (VIPS:US), an online fashion retailer based in Guangzhou, advanced 1.5 percent to a three-day high of $32.99. E-Commerce, a Beijing-based online retailer known as Dangdang, climbed 1.1 percent in its fourth day of gains to $8.17, the highest price since May 2012.
China’s consumer confidence is recovering and retail sales will show improvement in the second half, Commerce Ministry spokesman Shen Danyang said yesterday in Beijing.
ADRs of PetroChina Co. (PTR:US), the nation’s largest oil producer, gained 1.1 percent to $110.70. The stock’s rating was raised to buy from neutral by Ji-Asia Research Ltd. yesterday.
Melco Crown Entertainment Ltd., a casino operator in Macau, increased 2 percent in its fourth day of gains to a record high of $25.13.
Hotels guests in Macau rose 17 percent in April from a year earlier, which helped business in casinos, according to a report by Bloomberg Industries.
The Hang Seng China Enterprises Index in Hong Kong slipped 0.1 percent to 9,733.54, extending its retreat this month to 8.2 percent. The Shanghai Composite Index (SHCOMP) added 0.1 percent to 2,159.29, taking its loss to 6.1 percent this month.
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