Chinas 3rdChild Policy Boosts Shares in Toy, Diaper Makers

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Shares in Chinese toy makers, diaper producers and infant food companies soared for the second day on Tuesday, as investors piled into stocks seen as benefitting from Beijings new threechild policy.

Chinas announcement on Monday to allow married couples to have up to three children from the previous limit of two also sent brokerage analysts scrambling to recommend stocks, despite a widelyshared perception that the policy shift wont have a sudden impact on the countrys declining birth rate.

Shares in toy maker Goldlok Holdings Guangdong Co jumped to their 10 daily limit for the second day, as did shares in Jinfa Labi Maternity Baby Articles Co.

Other babyrelated stocks, including milk powder maker Beingmate Co, baby products maker Shanghai Aiyingshi Co and toddler care equipment maker Ningbo David Medical Device Co also soared.

An index tracking the socalled third baby concept stocks, newly compiled by Hithink RoyalFlush Information Network Co, rose about 2.5 on Tuesday, while Chinas benchmark stock index was roughly flat.

Hu Yunlong, a Beijingbased hedge fund manager, said the sharp gains in such stocks were the result of shortterm speculation, as he sees limited immediate impact on corporate fundamentals.

China lifted the cap on births in a bid to stave off risks to its economy from a rapidly aging population. But analysts say the policy by itself is unlikely to boost many couples willingness to have more children, given high childcare costs.

Still, Xu Qi,…

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