Stocks of Chinese companies, trading in New York, had their best moth in August after February led by the performance of software developer Qihoo 360 Technology Co Ltd(NYSE:QIHU), which recently started search engine services in China.
The Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese companies in the U.S. rose 1.4 percent in August to 87.95, the steepest rise since February, Bloomberg BusinessWeek said in a report.
Qihoo, which launched its search engine on August 16, jumped 52 percent during the month. It forecast on Aug. 21 third-quarter sales that beat analysts’ estimates. Qihoo’s American depositary receipts surged to $22.39 on Aug. 31, from $14.71 at the end of July.
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Monthly active users of Qihoo’s computer-based products and services rose to record 425 million as of June, from 378 million a year ago.It forecast third-quarter revenue will rise as much as 73 percent from a year earlier to $82 million, beating the average $80.3 million estimate of analysts.
Analysts are expecting Qihoo's search engine to give entrenched local favourite Baidu, a good run for its money.
Baidu has about 80 percent of the online search market in China but the arrival of Qihoo has unnerved it. It has taken steps to direct traffic from Qihoo's search engine to its own homepage.
Baidu.com, Inc. (ADR)(NASDAQ:BIDU) dropped 7.5 percent in August, dragging its prices down 4.3 percent this year. The company lost search traffic market share by 4 percentage points to 8 percentage points to Qihoo, and the trend is expected to continue in the next two quarters.
Online travel company Ctrip.com International surged the most since 2009 and Sina Corp. climbed for the first time since January.
Ctrip.com, the nation’s biggest online travel agency, surged 29 percent in August to $16.13, the biggest monthly rally since November 2009. Its smaller competitor Elong Inc. climbed for the second month, rising 13 percent to $15.
Sina, which runs Weibo, a Twitter-like service in China, rallied 24 percent in August, snapping a six-month slump that was its longest losing stretch since January 2009.
The iShares FTSE China 25 Index Fund (FXI), the biggest Chinese exchange-traded fund in the U.S., sank 3.3 percent last month to $33.07, snapping a two-month increase.