Tech shares surge after Paris attack

Public security related companies attract investor fancy after the French tragedy

Technology stocks, especially those associated with public security, surged on Monday on renewed investor interest and expectations of robust demand for anti-terrorism technology and products.

Share prices of Shenzhen-based Infinova Co Ltd, a manufacturer of integrated surveillance systems, jumped by the 10 percent daily trading limit. Similarly, shares of Zhejiang-based Hikvision Digital Technology Co, the world's largest surveillance video camera producer, rose by 5.13 percent.

The products of both companies have substantial market shares in overseas markets including Europe, the United States and the Middle East. Industry analysts said that the terror attacks in Paris might boost their exports to international markets.

"Governments will clearly intensify counter-terrorism measures following the Paris attacks. Investors could pay attention to short-term opportunities in stocks related with public security and national defense," Dai Jupeng, a strategist at Sealand Securities Co, said in a research note.

Chinese public security authorities said over the weekend that the country will stay on high alert to combat terrorism after the Paris attacks and will strengthen police patrols and preventive measures in public areas.

Stocks of providers of intelligence analyses and makers of thermal imaging products, bulletproof vests, security check equipment and explosion-proof vehicles may also benefit from the governments' heightened efforts on counter-terrorism, Dai said.

While the surge in the related stocks might turn out to be a short-lived phenomenon buoyed by speculative funds, the markets for public security and anti-terrorism equipment and technology hold vast growth potential, analysts said.

The production value of the market in China will likely reach 500 billion yuan ($78.55 billion) by the end of this year. It will continue to grow as the country pushes its urbanization process. The development of smart cities requires integration of technology and urban planning, the Beijing-based Dongxing Securities Co said in a research note.

China has about one-third of the global market share for video surveillance equipment and saw its total production value exceed 33.3 billion yuan last year, according to the research.

Hikvision, the country's leading surveillance video camera producer, which owns a subsidiary in France, saw its overseas sales surge to $397 million in the first half of the year, up by 58.73 percent year-on-year. The company said in a recent interview with China Daily that it is planning to expand in the international markets. Last year, overseas sales made up 25 percent of the company's total revenue.