China’s plans to develop Hainan leads to an increase in the prices of Travel and Property stocks

There has been a recent surge in the demand for stocks associated to Hainan. This comes after the China’s President announced plans to improve Hainan’s economy.

 After the announcement over the weekend on plans to transform Hainan, some stocks on the market experienced a hike in their market value, tops on the stock gainers list in Hong Kong and Shanghai on Monday were infrastructure, travel and lottery stocks. This announcement was made during the 30th anniversary celebration of Hainan as a unique economic zone, other activities lined up to mark the event included fund raising to source cash to transform the area into a free trade zone with special emphasis placed on tourism which will look to promote sport lottery and associated activities like horse racing.

 Developments in Resorts and Properties will eventually yield dividends

 Real estate moguls in Hainan have invested a lot of dollars running into billions in theme parks, convention spaces and luxury resorts, still there are a lot of spaces that are under utilized. With government decision to locate a movie festival and an international trade fair event in Hainan, early real estate investors in Hainan like the Antaeus group and Lawton Development Company are looking to receive massive returns on their investments. Lawton share for instance rose to the daily 10% limit on the Shanghai stock exchange.

 Tourist companies and duty free stores are set to make a fortune

 Unlike Bali or Macau, Hainan has been slow to gain recognition as a tourist destination for international visitors. Last year, the island recorded over 67 million visitors with just about a million of those visitors from outside the shores of China. With these new government policies there is bound to be a rise in international tourist, thereby providing tourist companies and duty free stores a chance to grow all around the island.

 Strong Yuan

 The rise in sales that has trailed retail outlets over the last two years in Hong Kong is in serious danger if tourist find Hainan as an attractive destination. Well established high end brands like Louis Vuitton, Moet, and Hennessy may have to revisit their marketing strategy to take advantage of the duty free zone available in Hainan. This could lead to a shift of consumer base from Hong Kong to Hainan according to Catherin Lim, Bloomberg’s intelligence analyst.

 Respite for HNA

 This move will be welcomed as a much needed breakthrough for the struggling HNA group and rose from Hainan has been struggling to keep afloat. The company has been trying to liquidate its assets worldwide in order to remain relevant. It group of diverse portfolios which ranges from logistic to airline operations would receive a much needed boost.

 Energy Vehicle manufacturers are not left out

There are plans to ensure the island remains environment friendly. The Chinese government intends the limit the number of vehicles allowed on the island using scientific methods. There are plans by the govern to introduce policies that will increase the production of new-energy vehicles with the intention of reducing pollution and Hainan is seen as the perfect location to test run this idea.