The biggest winners in Shenzhen, ‘China’s Silicon Valley’? Pig and chicken farmers
- Shenzhen Stock Exchange’s agriculture index has rallied more than any other subgauge this year
The big stock-market winners in Shenzhen aren’t artificial intelligence and semiconductor companies. They are farmers.
Chicken breeders Shandong Xiantan and Shandong Minhe Animal Husbandry have climbed around 40 per cent this year through Tuesday, while pig farmer Muyuan Foodstuff is up 34 per cent. The Shenzhen Stock Exchange’s agriculture index has rallied more than any other subgauge in 2019, and is the only one to eke out a gain in the past three years as the city’s benchmark slid 22 per cent.
Analysts attribute the more recent gains to the likelihood of higher pork prices as African swine fever dents supply. And while trade tensions with the US have affected the price of soybeans, which are used as animal feed, progress in talks could result in China importing more from America, lowering breeders’ costs, said Dai Ming, Shanghai-based fund manager at Hengsheng Asset Management.
A pork producer stood out in Hong Kong too, with WH Group climbing more than 8 per cent over the past three days.
In another boost, the government has promised to support share listing and fundraising by qualified agriculture firms, according to official guidelines.
There may also be a longer-term, structural reason for the bullish sentiment.