Beneficiaries/Losers on Jap’s earthquake

Beneficiaries/Losers on Jap’s earthquake: UOB Kay Hian looks at sectors which could benefit from rebuilding Japan. We have also tried to identify SGX related counters within that Sphere.

1) Cement: Rebuilding process will drive strong demand for cement in Jap, however note of high transportation costs. Nonetheless, expect sentiment towards regional cement stocks to be positive in near term.
2) Timber: Japanese use much wood to build houses. According to media reports, many wooden houses in the north-eastern coast of Japan have been destroyed. As such, rebuilding Japan will need a lot of timber and therefore will drive timber prices in the region higher. (Guangzhao Forestry)
3) Steel and non-ferrous metals -Will be heavily used in rebuilding houses, roads, bridges, power cables, and railroads. Japan is likely to increase imports of steel and non-ferrous metal from other Asian countries, particularly China. (XinRen Aluminium)
4) Coal - Rebuilding Japan will drive demand for steel and therefore coking coal. Coking coal prices are likely to move higher in the near term. (Straits Asia Resources)
5) Telecom equipment - The earthquake has caused significant damage to the telecommunications networks. China-based telecom equipment makers, such as ZTE and Comba, may be able to sell more products to Japan, although they currently do not export much to Japan.
6) Insurance - Insurance and Reinsurance Companies will be adversely affected.
7) Auto makers - Auto makers could be adversely affected because the supply of components from Japan may be temporarily affected. Mainland-based auto markers with JVs with Japanese auto makers are more likely to be affected.