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How coronavirus has affected business

By Sara Okuoro | January 28th 2020 at 01:02:10 GMT +0300

The coronavirus has so far killed at least 100 people in China and infected almost 4,000, with about 44 cases confirmed in more than 10 countries abroad including France, Japan and the USA.  

Some cities around China’s Wuhan in Hubei province, where the virus is believed to have originated, have been put on lockdown following the outbreak.

Several other countries have issued travel advisories to China in bid to prevent the coronavirus from spreading.

““Kenyans are urged to avoid non-essential travel to Wuhan until the situation there is contained. Those on essential travels must comply with additional screening measures that have been put in place by authorities. The Ministry of Foreign Affairs will keep updating on the situation of Kenyans living in the affected region,” said the Ministry of Foreign Affairs in a statement.

The effects are rippling around the world, with global stocks falling sharply as concerns grow over the economic impact of the outbreak.  

Covid 19 Time Series

 

The outbreak has coincided with the Chinese New Year, when travel and spending typically spikes.

Global stock and oil markets have been hit while haven assets such as gold are up. Oil prices dropped by more than 2 per cent, with Brent crude futures, the international oil marker, falling to USD59.32 (Sh5,986) a barrel, as traders fear demand could drop if China's economy stalls.

European stocks are falling, with major names in the travel, luxury and mining sectors tumbling, Financial Times reports.

Asian stocks also declined. The airlines were among the hardest hit market with South Korea’s Korean Air Lines plummeting 6.69 per cent, Singapore Airlines declined 2.95 per cent and Japan Airlines slipped 0.38 per cent. Australia’s Qantas Airways fell 5.22 per cent.

China’s Ministry of Transport has said that air and rail passenger numbers were 41 per cent lower compared with last year on the first day of the Chinese lunar new year.

On Monday, key indexes for British, French and German equity markets slid more than 2 percent, as did Pan-European markets on worries about the potential economic impact from the deadly virus. Stocks on Wall Street fell more than 1 percent, according to Aljazeera.

Shares in some of the world’s major luxury brands have taken a pounding since the coronavirus outbreak got international attention.

In London, clothes maker Burberry, which makes about 16 per cent of its sales in China, fell 4.79 per cent. China is one of Burberry's fastest-growing markets, and has warned investors that a drop in Chinese spending could spell a decline in its own revenues, reports BBC.

Businesses are also offering workers longer holidays, as well as telling employees returning from the most affected areas to stay away from work. Shanghai has ordered companies not to open until February 9 while manufacturing hub of suzhou has postponed the return to work of millions of migrant workers.

Analysts have compared the situation to the outbreak of SARS, which killed almost 800 people and saw China’s annual growth slump from 11 per cent to 9 per cent. The SARS outbreak happened between November 2002 and July 2003. 


Coronavirus SARS Stock Markets Business China
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