These are the stocks benefitting from China’s outbreak of bird flu

April 3, 2013
April 3, 2013

What do biotechnology and rice wine have in common? They both might cure bird flu. Or at least, Chinese investors are betting people will think they do.

As of today, nine people have mysteriously contracted H7N9, a strain of avian influenza not known to have infected humans before. Four of the patients have died, according to official Chinese media. After officials reported more cases today (April 3), Chinese pharmaceutical and rice wine companies listed on the mainland saw their share prices jump. Even though there is no vaccine for the virus (part of the reason authorities are so worried) investors appear to be anticipating a run on medicines and rice wine, which is believed to prevent or even cure bird flu (link in Chinese). Farmers have said that feeding their chickens rice wine make them more resistant (article in Chinese) to some forms of bird flu.

Chinese pharma companies Shenzhen Neptunus Bioengineering and Guilin Layn Natural Ingredients Corp both closed about 10% higher in Asian trading, notes Fredrik Oqvist, who writes about Chinese equities, even as the Shanghai Composite fell 0.11%Shandong Lukang Pharmaceutical Co and Beijing Tiantan Biological Products also soared.

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Rice wine makers Zhejiang Guyuelongshan Shaoxing Wine and ShangHai JinFeng Wine also saw their share prices rise today, though less sharply, by 2.0% and 0.3% respectively.

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