China smog bad for health, good for business (Update)

Jan 15, 2013

Shares in a Chinese facemask manufacturer soared on Tuesday as investors looked for opportunities to profit from the severe air pollution that has blanketed large swathes of China.

The smog has been classed as hazardous to health but facemask maker Shanghai Dragon surged by its 10 percent limit for a second day to end at a five-month high, and pollution control equipment maker Fujian Longking also closed up 10 percent.

"We expect investors to continue to favour environment protection-related stocks... as Beijing emphasises air quality," Shanghai Securities analyst Peng Yunliang told Dow Jones Newswires.

Acrid smoke and haze shrouded large swathes of the country over the weekend and Monday, helping sales of facemasks and other products such as air purifiers.

"The purchases were made because of the pollution for sure," said a manager at a Beijing outlet of pharmacy chain Jinglongtang, where facemask sales had surged.

"The masks were all sold out by Monday," the manager, who declined to be named, told AFP.

Most air purifiers at gome.com.cn, one of the country's leading home appliances shopping websites, were sold out, the state-run China Daily said.

"We started to run out of stock on Sunday night because orders for air purifiers suddenly flooded in," the report quoted Gome spokesman Peng Liang as saying.

Sales were at least eight times higher than the same period in previous years, he added.

Gome's rival Suning said searches on its website for both air purifiers and face masks were three times higher than average on Monday morning, the newspaper reported.

Official media have been openly critical of the pollution and urged the authorities to act.

At the height of the smog Beijing authorities said readings for PM2.5—particles small enough to penetrate the lungs deeply—hit 993 micrograms per cubic metre, almost 40 times the World Health Organization's safe limit.

Doctors at two of Beijing's major hospitals said the number of patients with respiratory problems had increased sharply during the period.

Pollution levels were generally lower on Tuesday, with the China National Environment Monitoring Centre giving the air quality index in Beijing as 148, or "slight pollution" and the US embassy measuring it as 189, or "unhealthy" on its scale.

The Chinese AQI figures were 185 in the eastern city of Jinan and 175 in the central city of Changsha—both in the "medium pollution" range.

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