Condom shares fall after China abandons the one-child policy

Shares of companies that make nappies, pushchairs and baby milk got a boost this week from China's decision to scrap its one-child policy.

But for the maker of a popular brand of condoms, it was not the brightest.

Investors are betting on a bump in sales for companies with baby or child-related businesses after China's Communist leaders announced that all married couples would be allowed to have two children.

Analysts at investment bank Credit Suisse estimated that the relaxed controls would result in an extra 3-6 million babies born annually in the five-year period starting in 2017.

The economic waves travelled as far afield as New Zealand, where the currency of the dairy-exporting country surged.

Among the biggest losers was Japanese condom maker Okamoto Industries Inc, a favourite of Chinese visitors to Japan, slumping 10 per cent in Tokyo.

China, the world's most populous country with nearly 1.4 billion people, has about 16.5 million births each year.

The one-child policy began in 1979 to curb a surging population at a time when extreme poverty was widespread in China.

Although there may be some good news for condom makers, with analysts cautioning the increase in births may not be as big as predicted because of the expense of raising a second child and other factors.

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