Shares of Chinese sportswear manufacturers have soared as investors bet that the Beijing Winter Olympics will help boost demand in the wake of the government's recent health awareness campaign.
On Friday, shares of China's domestic sports brands, such as ANTA Sports, increased by more than 5%. Additionally, ANTA owns the brands Descente, Fila, and Salomon.
As the winter games unfurl, the world's third most valuable sportswear company is expected to be a major winner.
Li Ning Co, founded by a medal-winning Olympic gymnast, was up nearly 7% following the Lunar New Year holidays.
"The Winter Olympics provide a new stimulus for China's sports brands, and ANTA and Li Ning, as market leaders, are well positioned to benefit from the segment's robust future prospects," said Linus Yip, chief strategist at First Shanghai Securities.
Sports-related stocks soared last summer as a result of a nationwide boycott of foreign brands that avoided Xinjiang cotton over concerns about Uyghur human rights.
COVID-19 outbreaks, rising cotton prices, and a slowing Chinese economy have all weighed on demand, but expectations for the Olympics and Beijing's campaign to get people moving have been cited as demand drivers.
On the eve of the capital's opening ceremony, Bach told an IOC meeting: "China has already made history by achieving the goal of 300 million Chinese people participating in snow and ice sports."
On Friday, the Beijing Olympics officially begin, an event that Chinese President Xi Jinping has promised will be organized, safe, and "splendid."
The Beijing Games, the second Olympics to be held during a coronavirus pandemic, are being held within a tightly controlled "bubble" designed to isolate teams, the media, and the Chinese workforce responsible for their care from the rest of the world.
Participants in Beijing are confined to a "closed loop" to avoid contact with the general public, using official transportation to travel between their accommodations and Olympic venues.
Additionally, each Games participant is tested daily in order to quickly identify any infections within the loop.
In contrast to many other countries that are attempting to coexist with COVID-19, China has implemented a zero-tolerance policy that includes strict border controls and the cancellation of nearly all international flights.
Meanwhile, Xtep International Holdings Ltd advanced as much as 6.4% on Friday. Topsports International Holdings Ltd. increased by 4.8%.
"The increased visibility of these Chinese brands bodes well for sentiment on these stocks in the run-up to the Beijing Winter Olympics," Bloomberg Intelligence analyst Catherine Lim said.
