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Bird Flu to Affect Markets

Following the discovery of bird flu on the mainland, Shanghai medical workers were stationed at fever clinics, airports and train stations around the city yesterday to check the temperatures of travelers - a measure that was already in place for SARS but would help to detect bird flu too.

Millions of migrant workers began flooding back into the city this week after visiting their hometowns to celebrate Chinese New Year.

The discovery of bird flu on the mainland had little effect on the city's markets and restaurants yesterday, but is expected to weigh heavily on the Shanghai and Shenzhen stock exchanges when they open today after a 10-day holiday for the Spring Festival.

"We haven't seen any significant changes in our sales," an official at Sanguantang Market, the city's largest poultry and egg wholesale market, said yesterday. The market supplies poultry and eggs to hundreds of retailers around the city.

On an average day, its turnover hovers around 1 million yuan (US$120,000), accounting for more than 50 percent of the city's market share, according to the official surnamed Dong. He said sales were well below average yesterday due to the Spring Festival, but they hadn't fallen from earlier this week, before the flu was reported on China's mainland.

"The poultry products available in Shanghai are mainly from Anhui, Hunan, Jiangsu and Shandong provinces," Dong added. "We have never purchased any chicken from Guangxi Zhuang Autonomous Region, which is too distant from Shanghai." Bird flu has been reported from Guangxi this week.

Many restaurants known for their chicken dishes, including KFC and Shanghai-style Zhending Chicken, were packed with customers yesterday.

But analysts say poultry producers and other firms dealing in poultry business could see their stock prices drop when markets re-open today.

"When it comes to the impact on the stock market, the bird flu is not as devastating as SARS, given the current situation," said Wu Jie, a trader with Kinghing Securities Co Ltd. "But some investors will take advantage of the scenario to sell shares and take a profit from a lofty market. It is expected that the selling pattern will persist for the next one or two weeks."

The shanghai Composite Index, the benchmark index grouping both yuan-denominated Class-A shares and hard-currency Class-B shares, last closed at 1600.42 on January 16, chalking up a gain of 6.7 percent in the preceding lunar year.

(Shanghai Daily January 29, 2004)

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