Deadly ‘Super Fungus’ Fuels Surge In Chinese Pharma Stocks
China’s struggling pharma sector has gotten a major boost due to a deadly fungus that is spreading internationally. In fact, Chinese pharma stocks are surging.
The reason: It was reported that China has confirmed at least 18 cases of infection “in recent years” by the Candida auris fungus, which was reported on in an April 6 New York Times story for its drug resistance. In turn, investors rushed to purchase shares in biomedical companies in China and Hong Kong.
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“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,” Zhang Gang, Shanghai-based strategist at Central China Securities Co., told Bloomberg.
Case in point, Shandong Sinobioway Biomedicine Co. rallied 27 percent in three days.
“Other drugmakers that have risen by their 10 percent limits in the past few days include Jiangsu Lianhuan Pharmaceutical Co. and Jiangsu Sihuan Bioengineering Co. In Hong Kong, Shanghai Pharmaceuticals Holding Co. rose 2.9 percent to be among the best performers on the MSCI China Index. The benchmark Shanghai Composite Index closed down 1.6 percent while Hong Kong’s Hang Seng Index fell 0.9 percent,” Bloomberg reported.
Prior to this, pharma stocks were one of the worst-performing sectors in China due to a government trial scheme that drastically reduced prices of certain drugs.