Chinese pharmaceutical stocks and the wider market received a boost on Wednesday after local authorities approved a new vaccine to fight the coronavirus, amid rumors that Beijing was considering easing its zero-Covid policy.
Shares of CanSino Biologics rose 70% in Hong Kong after the Chinese pharmaceutical group said its inhaled Covid-19 vaccine had been approved for use in some cities. Its shares listed in mainland China also rose 20%.
The broader Chinese market rallied for a second day, with the Hang Seng index adding up to 2.6% and the CSI 300 gaining up to 1.9%, after unsubstantiated claims on social media that Beijing was preparing a roadmap to ease lockdown measures and travel restrictions.
CanSino said 13 cities in the eastern province of Jiangsu are preparing to roll out the vaccine. The announcement comes after authorities in Shanghai gave the green light to the product last month to improve inoculation rates in China’s most populous city.
The company has developed the world’s first approved inhaled vaccine against Covid, which some experts say could appeal to vaccine-hesitant sections of the population and boost vaccination in the country.
Proponents of the technology argue that the delivery method could improve protection because it produces an immune response in the respiratory system, where the virus first enters the body.
Jin Dong-Yan, a virologist at the University of Hong Kong, said CanSino’s approval was “a step in the right direction” as data indicates the technology behind its adenovirus-vectored vaccine offers better protection. than the inactivated vaccine technology used by the existing Covid in China. vaccine makers, Sinovac and Sinopharm.
Shares of other mainland vaccine makers also rose, with Shijiazhuang Yiling Pharmaceutical and Shanghai Junshi Biosciences up 10% and 24.5% in Shenzhen and Hong Kong, respectively.
Zhao Bing, a Shanghai-based analyst at Huaxing Securities, said after a bruising year for Chinese pharmaceutical stocks, “investors are reassessing” the sector.
“Before, investors panicked. Valuations are cheap and companies have had stable performance. It’s time to bounce back,” he said.
circulated online on Tuesday, saying Beijing had set up a task force to review plans to reopen the economy. The rumor and subsequent market rally came despite existing controls that underscore China’s embrace of zero-Covid.
Heard that “Reopening Committee” has been formed & led by Wang Huning, Politburo Standing Member. The Committee is reviewing COVID data from US/HK/SG to assess various reopening scenarios, target 03/2023 reopen.— Hao HONG 洪灝, CFA (@HAOHONG_CFA) November 1, 2022
HK finally rebounded 3%, A-shares +1%. $EWH $KWEB $FXI $PGJ https://t.co/ZgN2EYqUzH
This week, local authorities in Shanghai and Zhengzhou, home to the world’s largest iPhone factory, introduced localized lockdowns to halt a rise in cases. Shanghai authorities closed the city’s Disneyland theme park on Monday after a guest tested positive.
On Wednesday, the area around Apple contractor Foxconn’s factory in Zhengzhou entered a week-long lockdown. The move comes after workers fled the factory over the weekend to avoid being quarantined on site after an outbreak at the facility.
Chinese stocks have seen tumultuous trading in recent weeks, with investors selling shares after the country’s Communist Party Congress, where leader Xi Jinping replaced the economic pragmatists in his leadership team with a group of loyalists.
Last month, China’s chief epidemiologist, Liang Wannian, said there was “no timetable” for an exit from zero-Covid rules. Beijing points to China’s large elderly population and insufficient medical resources as the main rationale for its embrace of zero-Covid, even as the rest of the world has lifted most coronavirus controls.
Helen Chen, Greater China Managing Partner at LEK Consulting in Shanghai, noted that “the government’s vaccination campaign has waned as resources shifted to manage outbreaks.”
“The vast majority of Chinese were vaccinated in the second quarter of 2021, so the immunity offered by these vaccines has waned,” she added.
Additional reporting by Xueqiao Wang in Shanghai, Edward White in Seoul and Ryan McMorrow in Beijing
. chinese stock boosted by progress vaccine covid rumor restrictions soft