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China ADR Wrap June 15, 2010

China ADR Wrap June 15, 2010

June 15, 2010 (Chinavestor) – The bulls were back in force today as the Dow Jones Industrial Average (INDEXDJX:.DJI) gained 2.1% with all 30 of the index's constituents moving higher on the day and the S&P 500 finally moved above the all-important 200-day moving average. That fueled some bullish trade in Chinese ADRs and ETFs with the PowerShares Golden Dragon Halter USX China ETF (NYSE:PGJ) gaining 2.7%. Not to be outdone was the Claymore/AlphaShares China Small-Cap ETF (NYSE:HAO), which soared 2.5%. Chinese large-caps enjoyed the rally as well with the iShares/FTSE Xinhua China 25 Index (NYSE:FXI) adding 2.3%.

A 2.4% jump in crude oil to $76.94 a barrel, which took crude above a pivotal resistance point, fueled a rally in solar stocks with JA Solar Holdings (Nasdaq:JASO) gaining more than 9% and Trina Solar (NYSE:TSL) gaining 6.3%. LDK Solar (NYSE:LDK) tacked on 5.7% and Yingli Green Energy (NYSE:YGE) added almost 5.4%. Of course, the rally in oil benefited pure-play oil names with Cnooc (NYSE:CEO), China's largest offshore driller, adding $10.07, or 6%, to settle at $176.07.

Chinese tech names were also home to some strength on Tuesday as AsiaInfo Holdings (Nasdaq:ASIA) added 6% and (Nasdaq:CTRP) surged almost 8%, traversing its April high of $42.30. Telecom names were also worth trading City Telecom (Nasdaq:CTEL) gaining 5% and China Telecom (NYSE:CHA) nearly adding almost the same amount.

Large-cap losers were hard to come by. Syntura International (Nasdaq:SYUT) was overbought heading into the day and declined by more than 1%. Shanda Interactive Entertainment (Nasdaq:SNDA) continues to struggle to find momentum and retreated by almost 1% on the day.

As we noted earlier, small-caps were strong and that strength was almost as evident with the losers as it was the winners. The biggest small-cap loser on the day was China Architectural Engineering (Nasdaq:CAEI) was down less than 4% and ChinaCast Education (Nasdaq:CAST) lost a mere 3.7%. Other losers included a host of usual suspects, including ATA Inc. (Nasdaq:ATAI), which lost almost 3%, Tiens Biotech (AMEX:TBV), which slid 2.22%, and WSP Holdings (NYSE:WH). WSP didn't participate in the oil rally, sliding half a percent on the day.

RINO International (Nasdaq:RINO) got a big boost, surging more than 10%. China Housing and Land Development (Nasdaq:CHLN) shrugged off some less-than-encouraging news for the real estate sector, gaining 9.7% on the day. China Green Agriculture (NYSE:CGA) added 8.33% on volume that was about 75% above the daily average after reaffirming 2010 guidance. China Infrastructure Investment (Nasdaq:CIIC) added 8% on no news and lethargic volume.

A-Power Energy Generation Systems (Nasdaq:APWR) gained 8% on volume that was nearly 50% higher than the daily average. China Sunergy (Nasdaq:CSUN) participated in the solar rally, adding 6.44% on strong volume.


More Risks For China Property Market?

More Risks For China Property Market?

June 15, 2010 (Chinavestor) After spending much of this year under considerable pressure, the Claymore/AlphaShares China Real Estate ETF (NYSE: TAO) could be in for some selling as China's bank regulator is forecasting more risks on the horizon for a real estate market Beijing has worked diligently to cool.

The China Banking Regulatory Commission is asking banks to report on risk exposure before the end of this month after saying mortgage risks are rising. Property-price gains spurred concerns that a record 9.59 trillion yuan ($1.4 trillion) of loans extended last year to combat the effects of the global financial crisis may be causing asset bubbles, according to Bloomberg News.

China's property prices surged by more than 12% in May, showing the government's efforts to rein in real estate prices and a prevent an asset bubble from forming may not be working. The Claymore/AlphaShares China Real Estate ETF (NYSE: TAO) has gained almost 3% in the past month, but the ETF is down almost 10% year-to-date.

China's government has gone so far as to raise reserve requirements for banks and has raised downpayment requirements for first- and second-time home buyers along with a ban on purchase of third homes.

AgBank Readies $23 Billion IPO

AgBank Readies $23 Billion IPO

June 15, 2010 (Chinavestor) The Agricultural Bank of China is preparing to raise $23 billion through an initial public offering that will be the world's largest and list the bank's shares in both Hong Kong and Shanghai.

AgBank was founded by the dictator Mao Zedong in the 1950s. Some estimates had put the value of the IPO as high as $30 billion, but recent declines in Chinese equity markets have resulted in a lower offering price.

On Monday, Xinjiang Goldwind Science & Technology Co. scuttled plans for a $1.2 billion IPO. The Hong Kong portion of the AgBank offering sought to raise up to US$14.4 billion, according to the China Post. That includes a 15% over allotment. The Hong Kong portion offering is expected to equal 53% of the IPO.

Industrial and Commercial Bank of China (HKG:1398) previously held the record for the largest IPO, raising $21.9 billion in October 6, 2006. The first successful large bank IPO belongs to Bank of Communication (BoComm) (HKG:3328), where HSBC Plc. (NYSE:HBC) locked in a 20% stake at a significant discount back in June 2005. Bank of China (HKGF:3988) can next a year later, raising as much as $11.2 billion in June 2006.

IPO of Agriculture Bank of China will be different from previous mega bank IPOs in a sense that no major foreign financial institution will underwrite the max. allowed 20% stake. It is a proof that China doesn't need foreign capital nearly as much as back in 2005 and 2006.

AgBank, China's third-largest bank, has 24,000 branches. The Hong Kong-listed shares are expected to debut on July 16.

Xinjiang Goldwind Delays $1.2B IPO

Xinjiang Goldwind Delays $1.2B IPO

June 14, 2010 (Chinavestor) Xinjiang Goldwind Science & Technology Co., the Chinese wind turbine maker, scuttled plans for a $1.2 billion initial public offering in Hong Kong due to what the company called poor market conditions.

The company said it won't move forward with its planned IPO “in light of the deterioration in market conditions and recent unexpected and excessive market volatility." Those remarks were made in a statement issued by the company.

Goldwind is listed in Shenzhen and dropped its plans to list its shares in Hong Kong after the Hang Seng Index has declined by 10% since early April, according to Bloomberg News. Europe's sovereign debt crisis has tempered investor interest in risky assets, including Chinese equities.

Goldwind got almost all of its 2009 sales from Chinese customers and was hoping to use proceeds from the IPO to fund international expansion in markets such as Australia and the U.S., Bloomberg reported. The company planned to sell 395.3 million shares at between HK$19.80 and HK$23, which would have been good for 15% of the company.

China Stock Earnings Calendar June 14-18, 2010

China Stock Earnings Calendar June 14-18, 2010

June 17, 2010 (Chinavestor) The following Chinese companies are scheduled to report financial results for the first quarter ended March 31, 2010 starting June 14.

The week is extremely light, only Chindex International (NASDAQ:CHDX) is scheduled to report.

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