Opinion

George Chen

Post-earthquake concept stocks

By George Chen
March 24, 2011

By George Chen
The opinions expressed are the author’s own.

Have you had breakfast or lunch yet? In Hong Kong, I’m guessing few people are choosing sushi these days.

Many restaurants in Hong Kong, even Japanese restaurants, have been quick to distance themselves from the crisis in Japan since the earthquake as concerns about food safety are growing in many Asia-Pacific cities, including Beijing, Seoul and Sydney.

The Japanese authorities announced this week that they would widen a ban on exports of a wide range of food products from areas surrounding the earthquake-hit Fukushima Daiichi nuclear power station. In fact, even before the official ban, the health authorities in China, Hong Kong and South Korea were already monitoring all such imports from Japan.

I’ve seen a number of sell-side analysts recommend Chinese food and beverage stocks, including some fisheries, which are now expected to benefit from the Japan crisis as people turn to locally produced seafood. Australian and New Zealand seafood companies should also benefit. It sounds like a perfect time for banks such as ANZ to expand, helping Australian and New Zealand farmers and fisheries extend their reach beyond their domestic markets, turning a crisis into an opportunity.

Some Chinese brokerages called such stocks “post-earthquake concept stocks”. Have you read the story about how Chinese truck maker Sany sent to Japan their innovative truck that can shoot wet concrete several meters into the air? Sany is likely to be a typical post-earthquake star pick, as are construction companies in Japan.

It’s not a fun idea but it does make sense. After all, investors can’t just sit in front of television screens feeling sad but doing nothing. What’s your say about the post-earthquake era in Japan from the economic perspective?

George Chen is a Reuters editor and columnist based in Hong Kong.

Comments
One comment so far | RSS Comments RSS

What is sad is that not once do you mention the effect this disaster has had upon the people of Japan. Investments aside. I find it’s a sad commentary that investors and business entities will profit from the result of this disaster. I have to keep in mind that in the world of business their is no place for weighing in of the human element, only dollars and cents the bottom line. Where once thriving market existed now it being all but decimated another has a way to prosper. I suppose it is these types of sentiments that have not made me jump onto mishaps, such as the way Toyota was shorted so quickly after it had its break systems problems. The truck that can shoot cement into the air, sounds like a very applicable system in the event the operators of the damaged reactors need to reinforced in a manner that would not place operators at close range. As far as the Sushi and fish market, I can see where new sources of safe fish will replace those once provided by Japanese market sources, for years to come. I suppose I am not thinking about profiting from this disaster as much as still coming to terms with the facts that so many have been effected, will continue to be effected and the process of rebuilding infrastructures and lives will take billions and the proud and resilient people of Japan and members of the world community to see this dark time to a positive conclusion.

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