Korea and Japan reopen stocks as quarantine ends in China
(Bloomberg) – Travel and consumer stocks in Asia rose with many currencies in the region as traders bet popular destinations for Chinese tourists will benefit from Beijing’s decision to end quarantine for travelers .
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Taiwan’s Phoenix Tours International Inc. climbed 10% while Korea’s Lotte Tour Development Co. rose 7.7%. Among cosmetics makers popular with Chinese consumers, Shiseido Co. jumped 7.1% in Tokyo and Amorepacific Corp. gained 6.4% in Seoul.
People arriving in China from January 8 will no longer be quarantined, but they will still have to submit negative Covid test results, health officials said on Monday. This could lead to a surge in visits from Chinese tourists, which accounted for around a third of arrivals to Japan and South Korea in 2019 before the Covid pandemic.
“The Chinese government is taking a step towards a full reopening and this move could revive the momentum of Korean consumer-related stocks such as Chinese cosmetics, leisure and travel companies,” wrote Han Jiyoung, strategist at Kiwoom Securities Co., in a note.
Chinese stocks also rose, with the CSI 300 index up 0.9%. Among currencies, the Korean won gained 0.7% to 1,265.71 to the dollar while the Thai baht rose 0.3% to 34.615 at 10:42 a.m. in Hong Kong. The Association of Thai Travel Agents estimates that 3 to 5 million Chinese tourists will visit Thailand in 2023, the Bangkok Post reported.
“China easing quarantine rules and economic support measures lifted most Asian currencies excluding Japan, with the Korean won and Thai baht outperforming on growth optimism,” said Christopher Wong, currency strategist at Oversea-Chinese Banking Corp. in Singapore.
Department store Takashimaya Co. gave Japanese reopening stocks a boost after separately raising its full-year profit outlook. Its stock soared 9.4% while its counterpart Isetan Mitsukoshi Holdings Ltd. rose 8.2% to its highest level since February 2016.
Still, some Chinese reopening stocks fell despite the news as a continued rise in Covid cases dampened sentiment.
Some stocks of personal protective equipment are rising due to expectations that Covid cases will continue to rise as China reopens. Shares of Top Glove Bhd., a star in the early days of the pandemic, jumped 9.8% in Malaysia.
“I think it’s a little early to be sure the reopening will go according to schedule, just because the infection situation doesn’t seem clear yet, but the inbound tourism names have been performing slightly better recently and it makes sense that more buying interest would come,” said Mio Kato, analyst at LightStream Research.
–With the help of David Finnerty.
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