Chinese equities rose in New York, driven by Trina Solar Ltd and Yingli Green Energy Holding Co. on speculation investors are favoring solar makers with sufficient cash after Suntech Power Holdings Co defaulted.
The Bloomberg China-US Equity Index of the most-traded Chinese companies in the US added 0.2 percent to 90.53 yesterday. Trina gained the most in two weeks and Yingli rebounded from a four-month low. SouFun Holdings Ltd, owner of China’s biggest real estate information website, jumped the most in five weeks, while Suntech sank after a two-day advance.
Trina had $807 million in cash by the end of 2012, while Yingli had a cash balance of $490 million, according to data compiled by Bloomberg. Suntech was forced by eight banks into bankruptcy last month after defaulting on $541 million of convertible bonds due March 15. A global supply glut and cuts to government subsidies for alternative energy in Europe has spurred losses for Chinese solar manufacturers since 2011.
“The ones that are really at risk are the ones that have significant US debt coming due, like Suntech,” Gordon Johnson, an analyst at Axiom Capital Management Inc said by phone in New York. “Trina and Yingli have enough cash to meet their liabilities in convertible debt.”
The iShares FTSE China 25 Index Fund (FXI), the largest Chinese exchange-traded fund in the US, climbed 0.3 percent to $35.97 in New York, and the Standard & Poor’s 500 Index (SPX)advanced 0.4 percent to 1,559.98.
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