DThe Shanghai stock exchange suffered significant losses on Thursday because investors fear the economic outbreak of the corona virus and restrictive measures by the authorities. The Shanghai Composite Index lost 2.75 percent. On Friday, the stock exchange was closed due to the upcoming Chinese New Year.
In contrast to, for example, heavily battered airlines, the share prices of healthcare companies posted significant gains. Investors apparently expect increasing demand for medical devices and health services, from which previously unknown companies could benefit.
Many stock market winners
The strongest title in the Shanghai Composite Index was Shandong Lukang Pharma with a daily gain of more than 10 percent. Among other things, the company produces antibiotics. Zhende Medical also grew by more than 10 percent, almost as much. Zhende Medical supplies bandages and disinfectants for surgical instruments.
Jiangsu Nanfang Medical also has a similar product range, whose share price also rose by a good 10 percent on Thursday. Jiangsu Lianhuan Medical, a manufacturer of chemical products for the pharmaceutical industry, was one of the profiteers on the stock exchange.
Another stock market winner was the stock of Star Lake Biosciene, a company that not only researches biotechnological medicines, but also produces flavorings for food and animal feed. Henan Taloph Pharmaceutical is active in traditional Chinese medicine and has also attracted investors, as has Shanghai Shenqi Pharmaceutical, a manufacturer of anti-flu drugs.
At the technology exchange in Shenzhen, southern China, 6 of the 10 biggest price winners on Thursday included healthcare company stocks. These were, for example, Shenzhen Neptunus Bioengineering with a plus of more than 10 percent or BGI Genomics with a price increase of more than 6 percent. BGI Genomics is part of a network of institutions that research the human genome.
It is a comprehensible first reflex for investors to focus on the health sector in the face of the virus crisis. Most of the price jumps in Shanghai are likely to be the result of speculation, because none of the companies celebrated on the stock exchange have an active ingredient against the corona virus.
Companies that do not offer services that match the current situation also benefit from such reactions. It is unclear what contribution the products of the individual providers could make. Apparently, the stock exchange cannot assess the consequences of concrete consequences for individual shares at first glance.