Given the tremendous impact of the “bail out” plan on American stock markets, this Newsletter is non-traditional in a sense that it will give investors guidance for the upcoming days versus a month. To put latest developments into perspective ...

It's 11:00 A.M. on Monday and is a good time to take a deep breath and see what lays ahead today's trading for Chinese ADRs. For starters, energy pulled the broad Hang Seng Index up 1.6% after Friday's record 9.2% rally. Petrochina (PTR) had a strong showing closing 5.1% higher on the back of strong oil. So today's gain of $2.44 on the NYSE comes as no surprise. Aluminum Corp. of China (ACH) is strong today on news that the company is not considering cutting additional production despite low aluminum prices.

Here is the map of today's bloodbath. As predicted, CNOOC Ltd. (CEO) is hit the hardest - ADR lost $7.35 by mid afternoon. As we predicted in the morning before the bell, Chinese solar companies plunged, too. We argued that the sector is considered risky based on trading characteristics - and the fall of TSL, SDK and JASO clearly underlines our uneasiness of the sector.

Concerns over Lehman sent the Dow nose-diving, erasing almost all of the gains from the previous session. Chinese ADRs couldn't escape the bloodbath tracking Wall Street all the way. Shares of Baidu.com (BIDU), China's premium search engine company, got hit the hardest shedding $20.25 followed by CNOOC Ltd.'s (CEO) $10.41 fall. China's oil sector fell along weakening oil prices, a surprise for Sinopec (SNP) and Petrochina (PTR). Shares of PTR and SNP used to move in opposite direction from oil. High price of crude sent these large refiners into the red so easing oil should help them and not hurt. However market sentiment overrode conventional wisdom and all Chinese oil majors got hurt, as a result.

News that Freddie Mae and Freddie Mac will be taken over sent American indices soaring for the day. Strong market sentiment spilled over to Chinese companies listed on U.S. exchanges. But just how much they rallied - or which ones made investors cheer or cry - is summed up by the following table. This table is designed to sort Chinese ADRs based on their performance measured by change in dollars. The best stock was Baidu.com (BIDU), China's search engine giant, adding $3.72 to Friday's close. The stock is way oversold and is seen by many as a possible come back kid. Stronger dollar pushed Asian refiners higher as oil fell. Sinopec (SNP), China's largest refiner gained $.74 followed closely by Petrochina's (PTR) $.36 gain.

Most Chinese investors are increasingly turning bitter realizing that Olympics related hopes of a fast recovery of the stock market is fading away. But remember, we pointed out in our last Newsletter that Olympics related investment activity is tiny compared to the overall size of the economy and thus we don’t expect the Games to have a significant impact on equity markets. This projection turned to be true as the month of August passed away without any significant change in the direction of the Shanghai Composite Index or the China ADR Index. But solar companies rallied all over the board in August thanks to robust earnings. As the following table of Chinese ADRs sums it up, the best three stocks for aug 2008 were from the solar sector: Suntech (STP), Trina Solar (TSL) and Solar Fun (SOLF).

Chinese solar ADRs are extremely volatile. As the following summary table reveals, shares of Solarfun Power (SOLF) are up 47% just in August yet investors bought into the company on January 2nd. are down 45% year-to-date (YTD). And Solarfun is no exception. All Chinese solar ADRs but Canadian Solar (CSIQ) are trading way below their January 2, 2008 level turning this hot sector of 2007 into disaster in 2008.

Chinese ADRs are trading mixed today with Baidu.com (BIDU) taking the lead and Sohu.com (SOHU) taking a beating. Easing oil prices helped spur the DJIA to 11,315.00 points by 1:00 P.M. Lowering demand for the black gold became obvious today when statistics showed that U.S. drivers drove 3.5% less miles than last year, the biggest ever drop for the measure during the busy summer holiday season. Customs data showed that demand for oil dropped by 891,000 barrels in June vs. May, a sign that high price of oil is unsustainable. Many expect crude to come back to the $100 level within reasonable time. The greenback strengthened against both the Euro and the yen, adding fuel for the slide in the oil price. Looking at the U.S. listed Chinese stock universe, Baidu.com is shining the brightest today so far. China's premium search engine company is up $4.06 or 1.21% by 1:00 P.M., continuing a rally that seems to have no end. The price of the stock is up 17.8% since June 23 (chart here) when the company announced better then expected second quarter results plus a positive guidance for the upcoming quarter.

Wall Street saw better days then today. The DJIA is down over 300 points on high unemployment rate and record oil, approaching $150 a barrel. No wonder, shares of U.S. listed Chinese companies, or ADRs, follow suit measured by the broad China ADR Index or CAI. As the following table demonstrates, Chinese ADRs lost 3.41% today however there is a significant difference between NYSE and NASDAQ listed ADRs. While index heavy NYSE listed China stocks lost ground, measured by the China NYSE Index (CYI), NASDAQ listed Chinese ADRs hold ground thanks to a superb performance of NetEase (NTES), The9 and some solar companies.

China has become one of the biggest energy-consuming countries in the world. Currently, the oil price has reached its historical price. It is because the two largest developing countries, China and India, are hungry to energies and resources to feed their high speed growths. However, the negative impact of use of resources, that is pollution, has caused a series of social problems and is seen as one of critical issues which can restrict Chinese economic development. Therefore, an alternative clean-energy and renewable energy, such as solar PV, is highly recommended by Chinese government.

There is not much direction to find in market sentiment lately. While February turned to be a comeback for Chinese shares listed in the Hong Kong Stock Exchange, the same stocks nosedived in the U.S. the last trading day of the month tracking major U.S. indices lower. As the chart on the page demonstrates, February was somewhat an improvement over January for stocks in Hong Kong measured by the blue chip Hang Seng Index. Stocks posted their best monthly gain since October in Hong Kong. At the same time, the selloff on February 29 in the U.S., a day the DJIA fell 315.79 points, left the stock market stuck in a rut with no clear indication to get any better. As the saying goes, it will get worse before it gets better… The U.S. listed stock universe, measured by the China ADR Index (CAI) has not been able to recover January losses and fell heavily on Friday along overall market sentiment.

Major U.S. indices welcomed the news seding the DJIA up 272 points to12,012. Chinese ADRs followed suit with top ten movers on the table below. Momentum kept rolling and Chinese ADRs had the best day in modern history: all major Chinese ADR indices rallied over 6 percent. The China ADR Index (CAI) rose 7.79% or 77.88 points today to close at 860.68. Index heavy-weights pulled the index with energy companies leading. All of China's oil triumvirate advanced, PetroChina (PTR), CNOOC (CEO) and Sinopec (SNP). China's third largest cola miner Yanzhou Coal (YZC) was on fire just as China's leading search engine giant, Baidu.com (BIDU).

Trina Solar (TSL) surprised investors with a stunning 15% steady advance throughout the day. Large cap stocks dominated today with CNOOC Ltd (CEO) gaining $4.00 on strong oil prices. Shanda (SNDA) continues to really before earnings announcement later this week. CHL is up $0.88 on news that industry restructuring might not take place as thought. CHU was sold heavily in overseas markets of Hong Kong and Shanghai earlier the day.

This is an industry that came out of literally nowhere over the past few years. Many of playeres are based in China and the stocks have been absolutly screemeers over the past year but many have been cut in half over the past months. And of course when a hot industry gets cut in half we start looking for opportunity.

For the week, Chinese stocks sufered heavy losses. The "BEST" five stocks for the week were: LONG, TSL, UTSI, SNP and HTX. ELong Inc. said it will announce fourth quarter financial results on February 26, 2008. There is a strong chance that the company will beat analysts expectations, estimates that the company will return to the black. Elong has long been conceived as underdog when it came to industry rival Ctrip.com (CTRP). Ctrip.com has been delivering strong earnings with impressive earnings growth and came under fire lately after heavy snowstorms created havoc right before the Chinese New Year. Bad weather halted trains, mass transportation all over China, denting into CTRP's profit.

With no action in China in due to the Chinese New Year kicking in, U.S. listed Chinese stocks or adrs tracked U.S. market sentiment very closely. Regarding the home market, Wall Street finished a dismal week with a mixed performance Friday as investors grappled with fears about insurers of distressed mortgage-backed bonds and anxiety about the broader economy. The DJIA dropped over 60 points while the NASDAQ composite gained.

Renewable energy industry has grown rapidly while the oil prices keep hitting high records. The PV market demand has grown exponentially in the past decade to increase the utilization of abundant nature solar energy. According to Solarbuzz projection, PV industry revenues will reach US$18.6 billion by 2010, representing an annual growing rate of 13.7% from 2005. With players like STP, JASO, YGE, CISQ, SOLF, CSUN, TSL - all from China - it pays off to separate the darlings from the dogs. This blog entry is just a short relection on Suntech, one of the biggest players in the field.