Coronavirus infects Asia stocks with exposure to China (updated)

Able C&C Co

28/01/2020 09:04

(Adds comments from Malaysian rubber association in last two
paragraphs)
    SYDNEY, Jan 28 (Reuters) - Shares of companies highly
exposed to China's economy tumbled across Asia on Tuesday on
rising concern about the impact of global travel bans associated
with a virus outbreak, and even as some stocks involved in
preventative health spiked.
    After the United States and Canada warned against travel to
China, Australian stocks resumed trading sharply lower after a
public holiday.  The benchmark S&P/ASX 200 index  .AXJO  fell
1.4% weighed by stocks exposed to the illness that has killed
more than 100 people and infected more than 2,700.
    Shares of airlines and travel agents were sharply lower amid
freezes on travel into and out of the world's second largest
economy, while companies with an indirect exposure to Chinese
consumer spending abroad, such as casinos and luxury retailers,
also tumbled.
    "We don't know how long it will go," said Peter Costello,
chairman of Australia's $115 billion sovereign wealth fund, the
Future Fund, in a media briefing to coincide with a regular
portfolio update.  urn:newsml:reuters.com:*:nL4N29W36N
    "Obviously we hope that the measures that have been taken
now will contain the virus but it's still far too early. It will
have an obvious negative effect on the Australian economy and
indeed beyond," added Costello, a former Australian treasurer.
    With Chinese markets closed for the week-long new year
holiday, other stock markets in Asia were feeling an outsized
impact of investor concerns. 
    South Korean cosmetic makers highly dependent on Chinese
tourists coming to Seoul stumbled, with Tonymoly  214420.KS  and
Able C&C  078520.KS  losing more than 12% and 15% respectively
on Tuesday.
    Japanese travel company H.I.S.  9603.T , which owns an
amusement park popular with Chinese tourists in Nagasaki, has
tumbled more than 14% since early last week.
    Shares of Australia's biggest airline Qantas Airways Ltd
 QAN.AX  were down 5% on Tuesday, while travel agent Webjet Ltd
 WEB.AX  fell 11%. South Korea's top two airlines, Korean Air
Lines  003490.KS  and Asiana Airlines  020560.KS , dropped 6%
and 5%. Japan Airlines  9201.T  lost 7.9% and airline ANA
Holdings  9202.T  was down 6.0%.
    Australia's top two casino companies Crown Resorts Ltd
 CWN.AX  and Star Entertainment Group ltd  SGR.AX , which both
get a sizeable portion of revenue from vacationing Chinese
gamblers, each fell about 5%. 
    Traders meanwhile pointed to companies which might generate
sales from efforts to curb the spread of coronavirus as
investment prospects. 
    The Malaysian Rubber Glove Manufacturers Association
(MARGMA) said on Tuesday China had requested more urgent
shipments from the world's top producer, and its members were
ramping up production. Top Glove Corp  TPGC.KL  has seen its
shares surge by a quarter in a week.
    "MARGMA believes that demand for gloves will inevitably
shoot up and has urged its members to give priority to those
affected areas and countries," association president Denis Low
said in a statement. 
    Shares of South Korean mask producer Monalisa  012690.KS 
surged 29%, while South Korean pharmaceuticals Kukje Pharma
 002720.KS  and Woojung Bio  215380.KQ  added 29% and 21%
respectively on Tuesday.
    Japan's Kawamoto Corp  3604.T , which supplies medical
products including masks, saw its share prices triple, while
Japanese protective clothing maker Azearth  3161.T  rose 53% in
the past week.

 (Reporting by Byron Kaye and Paulina Duran in Sydney;
additional reporting by Hayoung Choi in Seoul and Hideyuki Sano
in Tokyo; Editing by Lincoln Feast.)
 ((byron.kaye@thomsonreuters.com; +612 9321 8164; @byronkaye;))