Chinese shares traded in New York rose, driven by energy and utility companies, as slowing export growth and cooling inflation fueled speculation the government will take measures to shore up the expansion in the world’s second-largest economy.
The Bloomberg China-US 55 Index climbed 1 percent, the most in a week, to 100.89 at the close of trading in New York. Oil producers from Cnooc Ltd. to PetroChina Co. gained as Sinochem Corp., the nation’s fourth-largest producer, plans an initial public offering in Shanghai. China Unicom Hong Kong Ltd. and China Telecom Corp. also increased after saying they will cooperate with an antimonopoly probe on their broadband Internet services by the government.
A customs bureau report showed China’s October exports rose 15.9 percent from a year earlier, the slowest pace since December 2009, as deepening debt crisis in Europe, China’s biggest overseas market, crimped demand. China’s economy needs to be driven more by consumption, International Monetary Fund Managing Director Christine Lagarde said in Beijing yesterday.
“Investors tend to gravitate toward more defensive names, like the telecom companies, when they have worries about Europe going into recession,” said Jeff Papp, a Lisle, Illinois-based analyst at Oberweis Asset Management Inc., who covers Chinese stocks. “We are getting the right data for monetary conditions to be slightly easing as opposed to tightening. People would have more comfort owning the Chinese stocks if policies are less restrictive.”
Sustaining Growth
China’s central bank raised interest rates three times this year to curb inflation and boosted lenders’ reserve requirement ratios on six occasions. Premier Wen Jiabao said last month the government will fine-tune economic policies as needed to sustain growth, which slowed to 9.1 percent in the third quarter from a year earlier, the least in two years. The nation’s consumer prices rose 5.5 percent in October from a year earlier, the slowest pace in five months, the statistics bureau said Nov. 9.
China Petroleum & Chemical Corp., the nation’s second- biggest oil producer known as Sinopec, climbed 3 percent to $104.18, bringing its gains this month to 10 percent, the most among the 55 most-traded U.S.-listed Chinese companies in the Bloomberg measure. PetroChina’s American depositary receipts advanced 1.7 percent to $132.
Oil Advances
Oil rose to the highest level in more than three months after a government report showed U.S. jobless claims unexpectedly declined, spurring optimism that a recovering economy will boost fuel demand. Crude for December delivery climbed 2.1 percent to $97.78 a barrel on the New York Mercantile Exchange, the strongest settlement since July 26.
The ishares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., gained 0.4 percent to $36.99. The Standard & Poor’s 500 Index added 0.9 percent to 1,239.70 yesterday after Italian bond yields retreated and Lucas Papademos, the former vice president of the European Central Bank, was named to lead a unity government in Greece.
The ADRs of Cnooc, the nation’s biggest offshore oil explorer, climbed 2.2 percent to $194.96. Each ADR represents 100 common shares. The increase caused the ADRs to trade at a premium over its Hong Kong-listed shares, which declined 5 percent to HK$14.88, the equivalent of $1.91 a share.
Sinochem IPO
Sinochem plans to raise as much as 35 billion yuan ($5.5 billion) in an IPO in Shanghai, to be the biggest in China this year. The company seeks to sell as many as 26.5 billion new shares in the offering, according to a statement on the Ministry of Environmental Protection’s website yesterday. Sinochem will use the proceeds to fund an oil refinery project in southern China’s Fujian province, the statement said.
China Unicom, the nation’s second-largest mobile-phone company said in a Nov. 9 filing its broadband unit is giving the nation’s top planning agency details on pricing, volume and sales for its bandwidth-leasing business last year. China Telecom, the nation’s largest broadband Internet supplier, said on the same day its services are “strictly in accordance with the relevant laws and regulations.”
The statements followed a report by the state-run China Central Television that the government started an investigation into the two companies which may result in fines of “billions of yuan.”
China Unicom gained 2.3 percent to $20.86 in New York and China Telecom climbed 1.1 percent to $60.46.
Yuan Retreats
The Chinese yuan weakened 0.1 percent to 6.3459 a dollar yesterday, according to the China Foreign Exchange Trade System. The currency has risen 4.1 percent this year, the best performance among the 25 emerging-economy currencies tracked by Bloomberg.
Chinese policy makers may try to limit the yuan’s appreciation if export growth were to slow “dramatically” over a short period, Brian Jackson, a Royal Bank of Canada strategist, said in an interview with Bloomberg Television from Hong Kong yesterday.
“Over the longer term, they definitely want to see away from reliance on exports toward greater focus on domestic demand,” he said.
The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, slid 1.8 percent to 2,479.54 yesterday. The measure is trading at 11.6 times estimated earnings, compared with 14.9 for Indian stocks, 10.3 for Brazilian shares and 5.3 for Russian equities.
The central bank may report as early as today Chinese banks made 500 billion yuan in new loans last month, up from 470 billion yuan in September, according to the median estimate of 18 economists surveyed by Bloomberg. M2, the broadest measure of money supply, grew 13 percent from a year earlier, the same pace as in September, the economists forecast.