Chinese equities rose in New York, driving the benchmark index up the most in a week, as the central bank’s pledge to ensure money-market stability boosted E-Commerce China Dangdang Inc. (DANG:US) and Suntech Power Holdings Co.
The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. climbed 1.9 percent to 83.12 yesterday, paring its monthly decline to 7.4 percent. Dangdang surged the most in a month, sending its volatility to a one-year high. Aluminum Corp. of China Ltd., known as Chalco, traded at the highest premium (ACH:US) over its Hong Kong stock since April 9. Suntech led a rally in solar makers after the government said it will promote the industry’s development.
The People’s Bank of China pledged to ensure money-market stability after interbank rates rose to records last week. Mark Mobius, who oversees $53 billion in emerging-market assets, said he’s confident in the PBOC and is keeping an overweight position on China after the 12 percent tumble in the Shanghai Composite Index (SHCOMP) cut valuations to unprecedented lows.
“The interbank rates already started to come down,” Sam Mahtani, who oversees about $5 billion as director of emerging markets at F&C Asset Management Plc (FCAM) in London, said in a telephone interview. “This correction presents a very good entry point for medium to long-term investors.”
Twelve-month non-deliverable yuan forwards strengthened 0.26 percent against the dollar to 6.2995 as of 4:18 p.m. in New York, gaining the most in seven weeks, after the currency traded little changed at 6.1453 versus the greenback in Shanghai, according to the China Foreign Trade System.
The iShares FTSE China 25 Index Fund (FXI:US), the largest Chinese exchange-traded fund (FXI:US) in the U.S., rallied 1.9 percent to $31.70. The Standard & Poor’s 500 Index gained 0.9 percent after data showed durable-goods orders and home sales increased more than economists forecast and consumer confidence rose.
Beijing-based Dangdang, China’s biggest online book seller, increased 14 percent to $7.08 for the steepest gain since May 20. Thirty-day volatility (DANG:US) on its stock surged to 99.7 yesterday, the highest level since June 2012, and compared with an average of 57 in the past year, data compiled by Bloomberg showed.
Chalco ADRs climbed 3.8 percent to $7.65 in New York, the largest gain since May 10. Its ADRs, each representing 25 underlying shares in the Beijing-based aluminum producer, traded 2.8 percent above (ACH:US) its Hong Kong-traded stock.
Suntech, the world’s biggest solar-panel maker in 2011, rallied 4.2 percent to $1. Yingli Green Energy Holding Co., the current largest panel manufacturer, added 5.1 percent to $3.06. Trina Solar Ltd. (TSL:US) gained 3.9 percent.
China should explore markets for solar power and promote the healthy development of the industry, according to a statement yesterday on the website of the National Energy Administration, citing the agency’s head Wu Xinxiong.
The PBOC has provided liquidity to some financial institutions to stabilize money-market rates and will use short-term liquidity operations and standing lending-facility tools to ensure steady markets, according to a statement posted to its website yesterday. It also called on commercial banks to improve their liquidity management.
“We are looking to add to Chinese exposure if the price is right” Mobius said in a phone interview from Monaco yesterday.
Shanda Games Ltd. (GAME:US), a Shanghai-based web game operator, jumped 4.5 percent to $3.92, its biggest rally in a week. Perfect World Co. (PWRD:US), an online games operator based in Beijing, soared 6.3 percent to $15.79, rising the most this month.
The Hang Seng China Enterprises Index in Hong Kong dropped 0.8 percent to 8,871.28, the lowest price since October 2011. The Shanghai Composite Index slipped 0.2 percent to 1,959.51, the weakest level since January 2009. The Shanghai gauge is valued at 7.98 times projected 12-month earnings, the lowest since Bloomberg began to compile the data in 2006.
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