Shares of JD.com (JD -0.98%) and Weibo (WB -1.88%) each climbed 9.4% on Friday, while Sina (SINA) gained 8.2%, as investors hope fresh trade talks will ease trade tensions between the United States and China.
To be fair, most widely followed stock market indexes also rallied thanks to both a strong December jobs report and comments from Federal Reserve Chairman Jay Powell that the central bank "will be patient" with regard to raising interest rates this year. But with all eyes looking ahead to vice-ministerial-level trade talks set for Monday and Tuesday in Beijing, it's not terribly surprising to see the beaten-down shares of these three promising Chinese companies rally more than most.
That said, while there was no company-specific news for JD, Sina, or Weibo on Friday, there were other positive developments in recent months that probably fueled their respective pops.
Two weeks ago, for example, JD.com shares rebounded after Minneapolis police announced they will not bring charges against the company's founder and CEO, Richard Liu, over an alleged sexual assault that occurred last August. Liu, for his part, has repeatedly denied the allegations. But coupled with broader concerns over the slowing growth of China's economy, uncertainty surrounding the incident had weighed heavily on JD.com stock.
But that doesn't completely remove the cloud of suspicion over JD from the general public. And some investors are still skittish, given the company's apparent over-reliance on Liu in its day-to-day operations.
JD.com has since not only announced a new $1 billion share-repurchase program, but it's also -- at least according to The Wall Street Journal -- planning to restructure the business into three different segments. Many industry watchers view both moves as apparent efforts to stem the market's concerns.
Meanwhile, shares of Sina and Weibo are down nearly 50% over the past year as of this writing, albeit primarily as broader Chinese macroeconomic concerns have overshadowed consistently strong results from the closely intertwined companies. Remember, Sina owns a controlling stake in Weibo, so the Chinese microblogging platform's impressive growth -- Weibo advertising and marketing revenue climbed 48% last quarter, more than offsetting a 15% decline from Sina's portal ad sales -- has consistently served as a positive catalyst for both businesses.
Nonetheless, the relative strength of JD, Sina, and Weibo is of little consequence given today's extraordinarily volatile stock market, political strife, and persistent trade tensions. If the United States and China can demonstrate favorable progress on trade in their talks early next week, however, it could go a long way toward stabilizing the markets and helping companies like these shed their arguably undeserved stock-price declines.