Carmakers gain as bird flu fears hit public transport
Bird flu worries are continuing to reverberate through the mainland's stock markets, with carmakers' shares now rising on expectations that more people will use private cars rather than risk exposure to H7N9 by using public transport.
Anhui Jianghuai Automobile led the advance, surging 8.4 per cent to close at 6.97 yuan (HK$8.72) yesterday. SAIC Motor, the nation's largest carmaker, added 4.14 per cent to end the session at 15.34 yuan. Changan Automobile, a partner of Ford Motor and Mazda Motor, jumped 5.44 per cent to 9.88 yuan.
In Hong Kong, Geely Automobile, which owns Swedish carmaker Volvo, rose 3.44 per cent to finish at HK$3.61. Dongfeng Motor Group, China's biggest maker of Japanese-branded cars, added 1.69 per cent to HK$10.86.
The Shanghai Composite Index added 0.64 per cent to close at 2,225.78 points, while the Hang Seng Index climbed 0.7 per cent to 21,870.34 points.
The increase in carmakers' stocks is reminiscent of events a decade ago, when Sars started spreading on the mainland.
Sales of private cars climbed 12.6 per cent month on month nationwide in April 2003, traditionally the low season for vehicle sales, according to a China Merchants Securities (CMS) research note.
Looking at the impact of Sars, CMS predicts more of the same.
"Private car sales will be boosted, as travelling in private cars is considered to be safer under the epidemic," CMS industry analysts Wang Liusheng and Tang Nan wrote in the research note.
However, the analysts said coach and bus sales would come under short-term pressure as passenger volumes fell due to fears that public transport might increase people's chances of exposure to H7N9.
CMS gave Changan Auto and SAIC "strong buy" ratings.