Coronavirus infects Asia stocks with exposure to China
28/01/2020 04:57
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 new virus outbreak, and even as some stocks involved in
preventative health spiked.
After the United States and Canada warned against travel to
China where the new coronavirus is thought to have originated,
Australian stocks resumed trading sharply lower after a public
holiday the previous day. 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.
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 tripled, while
Japanese protective clothing maker Azearth 3161.T rose 53% in
the past week.
Malaysia's Top Glove Corp TPGC.KL has seen its shares
surge by a quarter in a 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;))