Not quite sure what caused them to rise, as it was an otherwise lackluster day. But I suspect it had something to do with this headline:
- Harbin Electric Offered 'Going Private' Bid From CEO Yang or
- Harbin Electric LBO: A Sign of Things to Come?
So with the stock priced depressed as US investors shied away from Chinese hybrids, they offered to do a leveraged buy-out! Cool.
I think that sent shockwaves through the community of shorts on these stocks. It is easy to bash a stock and create fear 5,000 miles away on companies in a different culture and using a different language. But it is quite different if the management of those companies steps to the plate with real cash to take the firm private! I suspect this is just the beginning of a rally in these stocks (even though up 19% since 9/24, they have a long way to run).
Finally, the M&A activity was not just with Chinese stocks. GYMB also got an offer from BAIN to also go private (Bain pays $1.8 billion for kids clothing firm Gymboree). This type of activity is almost always bullish for the value stocks in MFI.