Jefferies picks the global robot and health stocks to play a population 'mega trend'

Published Thu, Aug 12 202110:30 PM EDTUpdated Sun, Aug 15 20217:52 PM EDT

Lucy Handley @in/lucy-handley-b2b0a61a/@lucyhandley

Analysts at investment firm Jefferies have picked stocks set to benefit from a demographic "mega trend," saying the global population is set to peak and then fall. Stocks to play the theme include those in the robotics and health care sectors, the bank said. Jefferies analysts led by Simon Powell said the global population would peak at an estimated 9.7 billion in 2064 — and then fall — citing research by the University of Washington in a note to investors on Aug. 9. "This is in contrast to many studies that seem to suggest that population continues to rise to 10 bn and beyond," they added, saying this is due to falling birth rates, especially in China and India. The analysts picked stocks set to benefit from an aging Chinese population and said the demographic trend could create a "meaningful tailwind" for some companies. "Aging populations is not a new theme, but the scale of aged people is set to surprise on the upside. The global population of seniors aged 65 and above has grown more than 350% in 60 years and is projected to grow another 100%+ in the next 30 years," Jefferies' analysts stated. A falling birthrate in China is likely to have an effect on available labor in the country, which will be "detrimental" to the country's economic growth, the analysts said. Meanwhile Africa's population, especially in Nigeria, is projected to overtake China's by the year 2100, reaching 4.3 billion. "We prefer robots, property and selected consumer stocks. Shortage of working age populations will act as a strong tailwind to the robotics theme. As older population numbers surprise to the upside we like healthcare and property focused to that cohort," Jefferies analysts stated. The bank's picks include: Health care and robotics Jefferies highlighted robotics firms Fanuc Corporation and Yaskawa Electric as hold-rated stocks. Its buy-rated robotics stock is Siemens . The analysts are "positive" on the robotics sector. "Robotics have been a fast-growing industry, in order to make up for labor shortages and to assist in the care of elders," the analysts stated. The bank also included U.S. neuroscience firm Biogen and Australian biotech company CSL as buy-rated, and said: "Aging populations globally drive greater demand for healthcare. This is especially the case in developed markets." Jefferies' analysts are buy-rated on Chinese stocks including medical provider EC Healthcare and medicine company Shanghai Fosun Pharmaceutical . "Chinese consumers begin to show increased preference to exercise more and eat more healthily … As the population ages there will be more retired people with time for travel, recreation and healthy life styles," the analysts wrote of how people will behave in future. Consumer products and property Jefferies analysts are also buy-rated on skincare company Beiersdorf , saying it will likely benefit from an aging population, and also picked Indian stocks Hindustan Unilever and consumer goods company ITC . "India's growth in its middle class will continue long after the Chinese middle class growth has stalled. There could be a rotation out of China consumer staples into Indian consumer staples," the bank's analysts wrote. In property, it chose Indian developer Godrej Properties as its top pick in the sector. "[Godrej Properties] is a 100% residential-oriented developer and the only national player. It is also India's largest developer by pre-sales. The company has strong capital raising advantages," the analysts stated. Jefferies is also buy rated on Indian property firms DLF and Oberoi . - CNBC's Yen Nee Lee contributed to this report.

An attendee at the RoboDEX exhibition in Tokyo, Japan, on Thursday, Jan. 18, 2018.

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