Pakistan Real Estate Times - Pakistan Property News

Full Version: Swine flu spreads economic shivers
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
PARIS: The global outbreak of swine flu sent shivers through financial markets on Monday just as some signs had appeared that the global economic crisis might be easing.

Travel and tourism took the brunt of uncertainty about how the threat of a pandemic might crimp economic activity, but the pharmaceutical sector rose as attention turned to defensive medical treatments and equipment.

Shares in Swiss drug giant Roche surged and then settled with a gain of 3.51pc on prospects of a surge in demand for its treatment Tamiflu, a focus of interest during previous alerts over bird flu.

An analyst at Vontobel in Switzerland, Andrew Weiss, said: “When fear about bird flu really took hold in the fourth quarter of 2005, the price of shares (in Roche) rose strongly.” In 2006 and 2007 Roche had made sales of Tamiflu worth a total of 4.0 billion Swiss francs (2.65 billion euros, $3.49 billion), he recalled.

Rapidly spreading concern about possible international contagion from a fatal outbreak of the human version of flu originating in pigs also pushed up the yen. In Tokyo, the yen firmed to 96.75 against the dollar from 97.13 in New York late on Friday. Analysts said that the dollar was weakened in part by growing concern over the impact of the new strain of swine flu. “The outbreak of swine flu in Mexico is a concerning development for the global economy,” said Societe Generale analyst Patrick Bennett. “Initial investor reaction has not surprisingly been towards risk aversion.”

Pig flu also drove down oil prices with the threat of a drop in air travel, analysts said. In London, Manoj Ladwa, a senior trader at financial spread-betting firm ETX Capital in London, said: “Swine flu is ripping through the markets creating uncertainty in its wake.” He added, “US markets are sure to be heavily affected by this crisis when they open later today.”

With the World Health Organisation warning that the outbreak could become a pandemic, the United States declaring a public health emergency and the European Commission calling an urgent meeting of health ministers, stock markets recoiled in alarm.

Amid uncertainty over the possible implications of anxiety over flu on economic activity, notably in such sectors as tourism and retailing, investors and analysts took the line of caution. In London the FTSE index of leading shares was showing a mid-morning fall of 1.20 per cent, Frankfurt stocks fell by 1.05 per cent and the Paris CAC 40 index fell 1.83 per cent.

http://www.thenews.com.pk/daily_detail.asp?id=174606
Reference URL's