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Anti-Japan protests hit related stocks hard

Updated: 2012-09-18 07:26

(HK Edition)

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Shares of Japanese-related retailers and car makers came under pressure on Monday over worries about the impact of anti-Japan protests on their business, with department store operator Aeon Stores (Hong Kong) Co Ltd falling to its lowest in seven months.

Major Japanese firms have temporarily shut factories and offices on the mainland after one of the worst outbreaks of anti-Japan sentiment in decades over the Diaoyu Island dispute.

"All Japan-related shares are under selling pressure as investors stayed away from those stocks, from chain operators to auto makers, which could be affected by anti-Japan protests," said Andrew To, a research director from Emperor Capital.

Aeon Store fell as much as 7.3 percent before closing down 5.4 percent to HK$19.10, their lowest since early February. "Whichever company has a Japanese name is seen under pressure as investors worry that their bottom line will be hit if the protest continues," said Alfred Chan, chief dealer at Cheer Pearl Investment.

Shares of Japanese-style noodle chain Ajisen (China) Holdings Ltd fell as much as 9.3 percent to their lowest since September 7 before closing down 6.7 percent to HK$5.01.

Springland International Holdings Ltd said in a statement on the Hong Kong stock exchange that its Changxing Yaohan department store and Changxing Datonghua supermarket were damaged by protesters in Changxing city in Zhejiang province at the weekend, with losses estimated at millions of yuan.

Japanese-related car makers also bore the brunt, with share prices falling significantly.

Anti-Japan protests erupted on the Chinese mainland over the weekend may cause more damage to Japanese automakers in the world's largest vehicle market than natural disasters last year, according to the state-backed dealership group.

Many dealerships on mainland that sell Japanese cars have shut for now, according to Luo Lei, deputy secretary general of the China Automobile Dealers Association.

Besides those boycotting Japanese goods, most Chinese citizens won't dare to buy Japanese-brand cars due to concerns over safety, Luo said.

"The impact caused by natural disasters can be fixed quickly, while it takes a longer time and efforts to make hostile sentiment against Japanese cars go away," Luo said in a phone interview on Monday, declining to quantify the damage as losses are still being tallied. "I have worked at the association for 10 years and this round of losses suffered by Japanese car dealers is the worst I've seen."

China Daily - Agencies

(HK Edition 09/18/2012 page2)

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