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Some Chinese stocks are doing well out of this US trade war
[HONG KONG] Not all Chinese stocks are getting hammered by the escalation in a trade war with the US.
Investors piled into agricultural and gold stocks as other equities plunged following US President Donald Trump's decision to slap tariffs on at least US$50 billion of Chinese imports, and then China announcing levies of its own on products including US nuts and wine. Also included in Beijing's 128-item hit list are steel products, pork, fresh and dried fruits, and ginseng.
The Shanghai Composite Index was down 4 per cent as of 2.10pm local time, leading declines among major equity markets and nearing its worst loss in more than two years. The Hang Seng Index in Hong Kong slid 3.3 per cent, without a single stock posting a gain, unlike some large caps on the mainland.
Here are some of the companies faring relatively well on Friday, and some that aren't.
Agricultural companies: Seed producers and pig breeders jumped on the mainland as Beijing announced reciprocal tariffs on US imports. Investors are speculating that the levies will make US products less price competitive, said Zhang Gang, an analyst at Central China Securities Holdings in Shanghai.
Of the top 10 biggest gainers on the Shanghai Composite Index, seven were agricultural companies. Gansu Dunhuang Seed Co rose the 10 per cent daily limit, as did pig farm operator Hunan New Wellful Co. Harbin High-tech Group Co, a soya bean processor, also jumped 10 per cent. China is the biggest buyer of US soya beans.
Gold miners: Investors flocked to safe havens such as gold producers as sentiment turned risk-off, Mr Zhang said. Gold producers topped the CSI 300 Index, led by Shandong Gold Mining Co and Zhongjin Gold Corp, which climbed 6.4 per cent and 5.6 per cent, respectively.
Wine makers: Organic wine producer Wei Long Grape Wine Co was among the gainers, advancing as much as 9.7 per cent in Shanghai, while milk and wine producer V V Food & Beverage Co added as much as 8.7 per cent.
Electronic component makers: Apple supplier AAC Technologies Holdings Inc, which got 62 per cent of its revenue from the US in 2016, slumped 8.2 per cent in Hong Kong, the most since Dec 6. AAC led declines on the Hang Seng Index. China Sinostar Group Co, which sells a wide range of electronic products, slumped 9 per cent in Hong Kong.
Home appliances: Machinery equipment, including electronic components and home appliances, accounts for 48 per cent of Chinese exports to the US, according to China International Capital Corp. Midea Group Co and Gree Electric Appliances Inc slumped 5.1 per cent and 4.3 per cent, respectively, on the mainland.
Furnishings, shoes, garments: Home furnishings producers listed in Hong Kong received 32 per cent of their revenue from the US on average in 2016, while shoemakers got 11 per cent. Li & Fung Ltd, an exporter of goods from home furnishings to shoes, slumped 9.3 per cent. Shoemaker Baofeng Modern International Holdings Co plunged 7.8 per cent and garment producer Carry Wealth Holdings lost 5 per cent.