Analysts say baby boom unlikely in China

Rally in maternity-care stocks may be short-lived

SHANGHAI: Chinese formula and maternity-care stocks advanced 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 surged by the 10% daily limit at the close, and Beingmate Baby & Child Food Co climbed 1.4% in Shenzhen on a day of muted moves in China’s stock markets.

Guangdong Qunxing Toys JointStock Co added 2.9%, and incubator maker Ningbo David Medical Device Co also rose.

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.”

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 pros- pects of a rapidly ageing population and has dealt with foreign criticism of its family-planning policies.

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