JA Solar Up; Brasil Telecom Up On Takeover Talk

Mar.31, 2008 in Market Outlook

ADR REPORT: JA Solar Up; Brasil Telecom Up On Takeover Talk

Last Update: 3/28/2008 3:28:50 PM

By Carla Mozee

U.S.-listed shares of overseas companies rose Friday, supported by Latin American
telecom stocks following word that Brasil Telecom Participacoes will be acquired,
and by upbeat comments about China’s JA Solar Holdings Co.

The Bank of New York Mellon American Depositary Receipt Composite Index rose 0.4%
to 168.92 and was on track for a weekly rise of 0.1%.

On Wall Street, the Dow Jones Industrial Average was down 23 points at 12282,
with financial stocks mostly lower though Citigroup Inc. (C) upgraded shares of
Lehman Brothers Holdings Inc. (LEH).

The S&P 500 Index shed 2 points to 1323, and the Nasdaq Composite Index lost 5
points to 2276.

JA Solar (JASO) shares advanced 6.4% to $19.05 after Lazard Capital Markets
initiated coverage on the company with a buy rating and a price target of $26 a
share.

“The company has rapid expansion plans, an excellent silicon position, low
processing costs, and a global reputation,” Lazard analyst Sanjay Shrestha wrote
in a note to clients.

Shrestha raised the price target on RenaSola Ltd. (SOL) to $18 a share from $12 a
share, but put a hold rating on SolarFun Power Holdings (SOLF). He said the
company faces near-term supply uncertainty because of delays caused by recent
winter storms in China.

RenaSola shares gained 0.2% at $12.23, while SolarFun fell 4% to $12.83.

The Latin Telecom ADR Index rose 0.8%, with shares of Brasil Telecom
Participacoes (BRP) 5.9% higher to $64.57 after local media reports that Tele
Norte Leste Participacoes (TNE), also known as Oi, late Thursday reached a deal
to buy Brasil Telecom for up to 8 billion reals ($4.6 billion). Details of the
transaction are expected to be outlined next week.

The combined entity would aim to compete on a regional basis with Brazil’s
biggest mobile phone company, Vivo Participacoes (VIV), which is controlled by
Spain’s Telefonica (TEF), and with Mexican wireless heavyweight America Movil
(AMX).

Shares of Oi bounced up 4.8% to trade at $25.95. Vivo shares were down 1.2%,
Telefonica was off 0.4% at $87.34, and America Movil slipped 2 cents to $61.58.

Separately, Moody’s Investors Service said it may upgrade Brasil Telecom’s senior
unsecured rating of Ba1, and affirmed its Aa1.br national scale senior unsecured
rating. The outlook is stable.

“The review will focus on the sustainability of credit metrics in light of the
significant changes expected for the Brazilian telecommunications industry over
the near to medium term,” wrote Sao Paulo-based analysts at Moody’s, “including
the introduction of number portability and several changes in the regulatory
framework intended to promote competition.”

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