News Archive
Devastation inflates bulldozer shares
Released on 13/05/2008
In Tokyo, shares in bulldozer and other heavy equipment makers rose on expectations of higher demand due to the cleanup and rebuilding from the earthquake that has devastated China’s Sichuan province.
According to the Associated Press, Komatsu Ltd rose 3.2 percent to 3,200 yen ($30.85), Hitachi Construction Machinery Co. jumped 4.6 percent to 3,400 yen ($32.78) and Tadano Ltd. climbed 1.9 percent to 1,037 yen ($10).
Meanwhile Sichuan was feeling acute pain from the biggest quake in 32 years, with the death toll standing at 12,000, with 180,000 still missing, as Tuesday drew to a close.
Writing for Forbes.com, Shu-Ching Jean Chen said the earthquake is likely to wreak great economic damage on Sichuan province and the nearby megacity of Chongqing, but not on China as a whole.
“In the immediate term, it could fuel price inflation in southwestern China for food and consumer necessities due to shortages, and it could delay China's ambition to rapidly build up the nation’s answer to Silicon Valley in the area,” Shu-Ching wrote. “It could also have an impact on projects to tap major natural gas deposits.”
Xinhua reported that there were no reports of damage from the Three Gorges Dam, located in the region, nor from any of the Olympic venues in Beijing, despite tremors being felt there.
The Shanghai and Shenzhen exchanges suspended trading in shares of 66 companies based in Sichuan on Tuesday pending the receipt by securities authorities of statements from the companies to update the markets on their situations.
Deutsche Bank analysts suggested China Telecom would be the worst hit by the disaster among telecom companies as it has 10% of its fixed-line network in the region.
Sinopec, which is developing Sichuan’s Puguang field, potentially the country's biggest natural gas deposit, could see future revenues compromised (the field is expected to account for 7% of its fiscal 2010 revenue).
Big insurers could suffer from higher claims, such as the country’s largest property insurer, PICC Property & Casualty and the two largest life insurers, China Life and Ping An.
