Chinese stocks trading in the U.S. rose to a two-year high on prospects economic data due this week will signal the nation’s recovery is sustaining momentum.
The Bloomberg China-US Equity Index of the most-traded Chinese shares in New York added 0.4 percent last week to 108.65, the highest since August 2011. SouFun Holdings Ltd. (SFUN:US) gained 10 percent as the nation’s biggest real estate website owner said it will start financial services to home buyers. Youku Tudou Inc. (YOKU:US) rallied the most in three weeks on speculation online content companies will benefit from the adoption of faster-speed wireless networks.
China’s new loans probably increased to 578 billion yuan ($95 billion) in November, from 506 billion yuan, according to the median forecast of 26 economists in a Bloomberg survey. The China-US measure has rallied 6 percent since the government vowed on Nov. 15 to allow more private investment in state-controlled industries and loosen its one-child policy in the most sweeping reforms in two decades.
“The economic recovery has some momentum to carry on,” Michael Ding, the lead manager of the China Region Fund at U.S. Global Investors, which oversees $2.2 billion, said by phone from San Antonio on Dec. 6. “The ADRs (PTR:US) are reflecting the bullishness of U.S. investors toward the Chinese economy.”
Industrial output probably rose to 10.1 percent in November from a year earlier, compared with a 10.3 percent increase the previous month, according to 30 economists surveyed. Industrial output figures are scheduled for release on Dec. 10, while new loans will be unveiled sometime this week, according to data compiled by Bloomberg.
The Communist Party last month released a 60-point document after a four-day meeting to map out a reform giving the market a bigger role in the economy. President Xi Jinping is trying to sustain long-term expansion while overcoming risks from rising debt and pressures on government-backed companies.
The document shows that “a pro-reform environment could reduce the risk premium investors demand for Chinese assets, which ought to re-rate Chinese assets up,” said Charlie Awdry, a London-based manager for Henderson Global Investors Ltd.’s 367 million pound ($600 million) China Opportunities Fund, in an e-mailed reply.
PetroChina Ltd. and China Petroleum & Chemical Corp., (SNP:US) the nation’s largest oil and natural gas producers, rallied on Dec. 6 as worsening air pollution fueled speculation authorities will encourage the use of natural gas.
American depositary receipts of PetroChina jumped 2.8 percent, the most since Nov. 18, to $119.07, erasing its losses last week. The ADRs traded 1 percent above equivalent shares in Hong Kong, the biggest premium since Nov. 18, according to data compiled by Bloomberg.
China Petroleum, known as Sinopec, climbed 2.5 percent to $86.23, paring its weekly loss to 0.1 percent.
The worst air pollution levels since government monitoring prompted the city of Shanghai to order vehicles off the road and factories to cut production. Premier Li Keqiang pledged in March to clean up pollution including cutting coal consumption, shutting steel plants and controlling the number of cars.
SouFun surged 10 percent last week to $71.64 after reaching a record high of $76.54 on Dec. 3. The company said on Dec. 2 that it will provide third-party financial products and services to its more than 15 million registered members.
“SouFun is expanding its business to finance,” said Ding, who holds SouFun’s shares. “It will be a huge business. That’s another reason to be bullish.”
Youku gained 7.4 percent last week, the biggest advance since Nov. 15, to $30.25.
The government granted licenses to China Mobile Ltd. and two smaller domestic carriers on Dec. 4 to start commercial service on the world’s largest fourth-generation wireless network, fueling speculation more customers will watch videos and play games on their smartphones.
Hollysys Automation Technologies Ltd., (HOLI:US) a Beijing-based maker of automation systems, declined 6 percent to $17.86. The company said on Dec. 1 that Changli Wang resigned as chairman and chief executive officer. Jianfeng He, who was chief operating officer, was elected chairman, while Baiqing Shao, a senior vice president, became CEO.
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