Where talk of war brings cheer

Mention Asia Zirconium to the average Hong Kong fund manager and the answer will most probably be 'Asia what?'. Yet the Chinese private chip listed on the SAR's exchange could be just what they are looking for: A stock which could actually appreciate should the bombs and bullets start flying in Iraq.

'Asia Zirconium is about the only stock listed in Hong Kong with a war concept,' said investment bank JS Cresvale. 'Zirconium chemicals produced by the company are used to produce zirconium metal which is used as an incendiary agent in military weaponry such as fire bombs and anti-tank missiles.'

The idea of a Chinese company helping the United States' war effort might sound strange, given the two countries are often at odds - remember the US spy plane row.

But that's what could happen. In its pure form, Zirconium is a grey lustrous metal which is highly combustible and can be used as the incendiary material in explosive devices such as cluster bombs used by US forces.

In an appendix to an Asia Zirconium report, JS Cresvale quotes John Luke, an F/A-18 Hornet pilot, saying that his zirconium-activated CBU-84s were 'effective against light armour, infantry and other soft targets'.

Asia Zirconium extracts upstream zirconium products from zircon sand at its Yixin, Jiangsu production facility and ships 85 per cent of them to clients overseas including the US, where companies can further refine them for military purposes.