APAC Sustainability: El Niño: Expected Country & Company Impacts

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APAC Sustainability: El Niño: Expected Country & Company Impacts

Counterintuitively, beverage majors and Otsuka’s Pocari Sweat may not benefit

in temperatures above 35°C due to reduced consumer mobility.

For retail more broadly, concerns over El Niño’s impact on earnings may weigh on

share prices, though they could create selective entry points.

Among trading houses, grain operations could suffer, though the overall

earnings impact is likely to remain limited.

Machinery & Agrichemicals:

Sustained heat could lift Daikin’s earnings through stronger air-conditioner sales;

as a “summer stock,” its shares tend to outperform during heatwaves.

Further weather disruption in Thailand poses downside risk to Kubota.

The El Niño can suppress outbreaks of diseases and pests, while also potentially

reducing planted acreage.

During the previous “Very Strong” El Niño in 2015/16, agrochemical sales at

Japanese chemical manufacturers such as Sumitomo Chemical and Mitsui

Chemicals declined.

Pharma & Biotech:

Rohto Pharmaceutical appears best positioned within biotechnology, as warmer

temperatures, higher UV exposure and longer summers support demand for sun

care, eye care, hydration and skincare products.

Santen’s anti-allergy drug Alesion may be supported, as higher temperatures can

promote cedar growth and lead to increased pollen dispersion in the following

spring.

Hotels, Railways, REITs & Insurance:

Railway operators and REITs may face demand shifts from summer to autumn,

alongside cancellation risks if typhoons coincide with long weekends.

The most direct impact to non-life insurers is the potential for increased claims

payouts from natural disasters, while for life insurers, key issues include the

effects of extreme heat, infectious diseases and disasters on mortality and