China.com soars on trade agreement news

2 min read

China.com (Nasdaq: CHINA) continued to rally on the trade agreement between the United States and China as shares jumped 29 percent Tuesday. China.com closed up 75 percent Monday.

Shares were up 29 1/8 to 130 5/16, or 29 percent on the Nasdaq Tuesday -- big gains for a company that closed at 58 on Friday. China.com went public in July priced at $20.

China.com is benefiting from being one of the few pure-play Chinese stocks available in the U.S. The United States and China inked a historic trade agreement after 13 years of negotiations. The pact clears the way for China's entry to the World Trade Organization (WTO).

In Hong Kong overnight, investors were bidding up Internet stocks, which are expected to attract a lot of foreign money following the U.S.-China deal, which ends a ban on foreign investment. The pact, signed on Monday, will allow foreign investors access to a number of industries, including telecommunications, the Internet and banking. China has also agreed to cut tariffs in its protected, state-dominated economy by 35 percent, on average.

It wasn't immediately clear how China.com would benefit. The company already has big backers such as America Online (NYSE: AOL) behind it. Analysts weren't immediately available for comment.

In China.com's third quarter, the company reported revenue of $5.2 million, up from $945,000 in the same quarter a year ago. The company lost $4.4 million in the quarter.

The company said e-commerce and advertising revenue was strong in the quarter. China.com reported 2.5 million average daily page views in September and 750,000 registered users.

The blue chip Hang Seng Index ended up 127.24 points or 0.87 percent Tuesday at 14,689.46, one day after achieving its highest level in more than two years. Turnover was an impressive HK$17.39 billion, up from HK$14.18 billion on Monday. Advances outpaced declines 329 to 276.

"There are relatively few things in life you can say are unadulteratedly positive and this is one of them," Merrill Lynch political analyst Richard Margolis said of the trade pact.

Reuters contributed to this report.