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Chinese U.S.-listed stocks are poised to advance this week, led by Sina Corp. (SINA), on prospects the government will roll out measures to boost growth in the world’s second-largest economy at an annual meeting next week.
The Bloomberg China-US 55 index of the most-traded Chinese stocks in the U.S. was little changed at 108.47 by 12:57 p.m. in New York, gaining 0.9 percent in the week.
Sina has surged 24 percent this week after saying its Twitter-like Weibo service, which has 300 million users, may start contributing to sales in the second half and as search engine Baidu Inc. started linking to Sina’s microblogs. Focus Media Holding Ltd. (FMCN), a digital advertising company targeted by short seller Carson Block, rallied 9 percent as analysts predict fourth-quarter sales will beat the company’s forecast.
China’s government will release its 2012 budget and Premier Wen Jiabao will deliver an address at a meeting of the National People’s Congress starting on March 5. While still the world’s fastest-growing major economy, China’s gross domestic product expanded at the slowest pace for 10 quarters in the three months to the end of 2011 as the European debt crisis and the sluggish U.S. economy cut demand for exports.
“They may talk about high-investment project approval and roll out measures to help the consumer as growth was a little bit slower than what they want,” Jeff Papp, a senior analyst in Lisle, Illinois, at Oberweis Asset Management Inc., which manages $700 million including Chinese stocks, said by phone yesterday.
China ETF Steady
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., slipped 0.5 percent to $40.17 yesterday, little changed in the week.
Shanghai-based Sina jumped 9.5 percent to $76.39 in New York yesterday, poised for the highest close since Nov. 16. The stock is headed for the biggest weekly gain since October.
Baidu, which handles more than 80 percent of search-engine queries in China, started displaying links to tweets on Sina’s microblog platform and other major social-networking websites in China, Kaiser Kuo, a spokesman at Baidu, said in an e-mail yesterday.
The “meaningful monetization” of Sina’s Weibo will start in the second half this year, Chief Executive Officer Charles Chao said on Feb. 27 on a conference call. Weibo’s registered users rose by about 50 million to more than 300 million in the past three months, he said.
The company will start a Weibo-based display advertising system in the second quarter and several fee-based services beginning in the second half, Chao said. Weibo may contribute $20 million to $30 million to Sina’s revenue in 2012, Andy Yeung, a New York-based analyst at Oppenheimer & Co Inc. wrote Feb. 28 in a research note.
Renren Gains
Baidu added 1.1 percent to $140.34, set for the highest close in two weeks. The stock has risen 4 percent this week, after sliding 1.5 percent the week before.
Renren Inc., another Chinese social networking website operator, climbed 6.8 percent yesterday to $5.85, extending its gain this week in New York to 12 percent. CEO Joseph Chen said in a Feb. 13 interview that he expects Renren to add more users this year than in 2011, when they increased by about 40 million. Beijing-based Renren had 137 million users at the end of September, the company reported in November.
The Standard & Poor’s 500 Index (SPX) slipped 0.4 percent to 1,368.62, cutting its advance this week to 0.2 percent.
Macau casino operator Melco Crown Entertainment Ltd. (MPEL) rose for a second day in New York, widening the premium over its Hong Kong stock to 4.1 percent, the highest since Feb. 1. Melco’s American depositary receipts climbed 3.2 percent to $13.42, while stock in Hong Kong added 3 percent to HK$7.98 yesterday. The ADRs are up 7.8 percent this week, the most since the second week of January.
Muddy Thwarted
ADRs of China Unicom (Hong Kong) Ltd. (CHU), the nation’s second- largest wireless network carrier, gained 0.5 percent to $18.03. The ADRs, each representing 10 common shares in the company, traded 0.6 percent above shares in Hong Kong, the most in four days. The Hong Kong stock rose 0.4 percent to HK$13.90 yesterday.
Shanghai-based Focus Media’s ADRs have rebounded 69 percent since Block’s Muddy Waters LLC research group issued its first report on Nov. 21 accusing the company of overstating the size of its advertising network and overpaying for acquisitions. Muddy Waters fifth Focus Media report on Feb. 9 carried similar allegations. The stock added 21 percent last month, the most since October.
Shanghai Winning Streak
The company may report next week that fourth-quarter sales rose to $224 million, according to the average forecast of six analysts compiled by Bloomberg. That would compare with the company’s estimate of $212 million to $214 million provided on Nov. 17. Focus Media ADRs are up 9.1 percent this week, the most since the first week of February.
The Shanghai Composite Index (SHCOMP) rose 1.4 percent to 2,460.69 yesterday, the highest close since Nov. 17. The gauge added 0.9 percent this week, a seventh week of gains and the longest winning streak since July 2009.
CNinsure Inc. (CISG), a Chinese insurance agency and brokerage, tumbled the most in more than three months in New York after reporting a net loss in the fourth quarter, the first since the company’s initial public offering in 2007.
CNinsure’s ADRs slid 11 percent to $6.29 yesterday, the biggest decline since Nov. 22. The stock has lost 22 percent in the week, the biggest decline on the Bloomberg China-US 55 index.
Guangzhou, China-based CNinsure incurred a net loss of 718.6 million yuan ($114 million) in the last quarter of 2011, compared with net income of 126.5 million yuan a year earlier and profit of 78.2 million yuan in the three months to Sept. 30, 2011, the company said in a statement after U.S. markets closed March 1.
