China Baby Stocks Surge as Government Considers Lifting Birth Limit

Chinese formula and maternity-care stocks jumped after the country was said to be close to ending limits on the number of children a family can have, though the gains could be short-lived as a baby boom seems unlikely.

Maternity goods firm Shanghai Aiyingshi Co. and incubator firm Ningbo David Medical Device Co. both surged by as much as the 10 percent daily limit. Beingmate Baby & Child Food Co. climbed as much as 5 percent in Shenzhen on a day of muted moves in China’s stock markets, while Guangdong Qunxing Toys Joint-Stock Co. advanced. Even piano makers enjoyed a boost, with Hailun Piano Co. and Guangzhou Pearl River Piano Group Co. advancing.

"The removal of birth limits won’t necessarily bring about a baby boom, so it’s likely a speculative trade that won’t last long," said Zhang Gang, Shanghai-based strategist with Central China Securities Co. "Big funds wouldn’t want to engage in such short-term trades, and the sector is just not big enough to handle the inflows."

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China’s cabinet is looking at what might happen if the country ended its roughly four-decade-old policy, said people who asked not to be named while discussing government deliberations. The country is facing the prospects of a rapidly aging population and has had to deal with criticism from foreign governments over its family-planning policies.

Read More: Why More Children May Be Bad for Economic Growth

Baby-related stocks in Japan also rose, with Pigeon Corp., Unicharm Corp. and Nippon Shokubai Co. adding at least 2 percent. Chinese tourists are known to go on shopping binges for high-quality consumer products on trips to countries like Japan.

The benchmark Shanghai Composite Index slipped 0.4 percent as of 11:06 a.m. local time.

— With assistance by Amanda Wang, and Kurt Schussler

(Updates with quote, Japan stocks and share prices.) LISTEN TO ARTICLE 1:38 Share Share on Facebook Post to Twitter Send as an Email Print