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Asian Tuna Shares To Benefit From Bird Fluff

30 January 2004 Singapore

As restaurants across Asia took chicken off the menu during an outbreak of bird flu, investors reshuffled their portfolios on Wednesday to boost exposure to seafood and pork while-carving away fowl-related stocks.

Hoping for a swift pick-up in demand for seafood as consumers shun poultry, investors poured money into Asian fish producers, pushing up prices of fish firms in Japan and Korea.

”You want to sell chickens, and get into fish and pigs. What you want to be doing is buying anything that slaughters pigs in China, outfits like People's Food,” said one Hong Kong-based food and beverage analyst.

He also suggested investors look at Thai Union Frozen Products PCL (TUF), a major canned tuna exporter and retail-focused conglomerate China Resources Enterprise Ltd.

Millions of chickens have been slaughtered and several governments including Singapore have banned poultry imports from a list of 10 countries now affected by the disease, including China and its vast poultry industry. At least eight people have died.

In one example of poultry disappearing from Asia's menus, Hong Kong-based airline Dragonair plans to drop chicken from its menus from Friday.

FISH FRENZY

Maruha Corp, Japan's largest seafood company, soared 12.5 percent after the country suspended imports of poultry from China, while its second-biggest fish firm Nippon Suisan Kaisha Ltd rose 3.19 percent.

Korea's Oyang Fisheries Corp, Daerim Fishery Co and Dong Won Fisheries Co, all jumped by a 15 percent daily limit as investors judged they were well placed to benefit from shifting consumer demands.

”It is all about expectations. Historically, such a sudden rally at fisheries shares, driven by an outbreak of a certain disease like mad cow disease, ended up with bursting as soon as the epidemic stabilizes,” said Oh Hyun-seok, an analyst at Samsung Securities.

Vietnam's biggest listed fisheries firm, An Giang Fishery Import Export Co (Agifish), also gained 1.2 percent, a day after Yum Brands Inc's KFC chain said it would switch its Vietnamese menu to fish from chicken.