HONG KONG (BLOOMBERG) - A deadly fungus that is spreading across the globe is sending Chinese pharma stocks surging.
Investors rushed to buy shares in biomedical companies in the mainland and Hong Kong after media reported that China has confirmed at least 18 cases of infection "in recent years" by the Candida auris fungus highlighted in an April 6 New York Times story for its drug resistance. Shandong Sinobioway Biomedicine Co has rallied 33 per cent in the past three days.
"Super fungus is a hot topic in China now. No medicine is able to cure the super fungus, but still that's enough to be a trigger for some hot-money flow into the pharma sector," Mr Zhang Gang, Shanghai-based strategist at Central China Securities Co, said by phone.
Other drugmakers that have risen by their 10 per cent limits in the past few days include Jiangsu Lianhuan Pharmaceutical Co and Jiangsu Sihuan Bioengineering Co in Hong Kong.
Shanghai Pharmaceuticals Holding Co rose 2.3 per cent to be among the best performers on the MSCI China Index.
Pharma stocks were one of the worst-performing sectors in China last year, hit by a government trial scheme that lowered prices of certain drugs significantly. Those shares have rallied after solid full-year earnings released in March, and the news of the fungus has provided a good catalyst for investors to add back their positions in the sector, Mr Zhang said.