Dec. 14, 2009 (Chinavestor) Abu Dhabi's pledge to lend Duba World's Nakheel real-estate $10 billion eased fears that the world economy is facing a double dip scenario. Stocks in Shanghai rallied sending the Shanghai Composite up +55.59points or +1.71% to 3,302.90 at the close. Oil companies were particularly strong besides Aluminum Corp. of China (SHA:601600) (NYSE:ACH) ; Asia's largest refiner by volume, China Petroleum & Chemical Corp. (SHA:600028) (NYSE:SNP), advanced 8.39% followed by a 3.63% move by index heavy weight Petrochina (SHA:601857) (NYSE:PTR). Sinopec shares did well in Hong Kong in addition, suggesting a strong market day for SNP on the NYSE. China Petroleum & Chemical Corp. ltd. (HKEX:0386) H-shares advanced 7.45% with heavy volume. Most of the strength is based on rumors that SNP will use its cash pile for acquisitions but we listed SNP as the fifth most oversold China ADR last Tuesday - see chart at the bottom of page. Rumors combined with a technical weakness turned to be a perfect catalyst for Sinopec.
Another stock we just highlighted last Friday was Aluminum Corp. of China (NYSE:ACH). We wrote that "Aluminum Corp. of China (NYSE:ACH) has been volatile in the past week as commodity prices fell on the strong dollar. But that trend might change and ACH is in a position to recover a 5% loss in an instant." Given the 2.86% run on Friday after the report, there is 2.14% left in the stock for Monday, if our 5% run is to be accurate...
Index futures point to a higher open, setting a stage for a potential strong day for China ADRs. For a stocks specific report ahead the bell read Volatile China stocks to watch on Monday.
Looking at Chinese indices and ETFs, the FTSE/Xinhua 25 china Fund (NYSE:FXI) and the Morgan Stanley China Fund (NYSE:CAF) are trading below their respective peers, suggesting a rebound for Monday.