Connect to share and comment

Hong Kong shares slump on bird flu worries

PlacardEnlarge
(Globalpost/GlobalPost)

Hong Kong shares slumped more than two percent to a new low for 2013 on Friday as investors fretted over bird flu in China, with Chinese airline stocks tumbling by as much as 12 percent.

The benchmark Hang Seng Index was 2.45 percent down in afternoon trade, falling 547.52 points to 21,789.97, after China announced a sixth death from the H7N9 strain of bird flu.

China Southern Airlines, the nation's biggest airline by fleet size, was down 10.17 percent while flag carrier Air China had dropped 12 percent and Shanghai-based China Eastern was more than seven percent lower.

"There is a big worry about the recurrence of the H7N9 bird flu that is really hurting market confidence," analyst Francis Lun, chief executive officer of GEO Securities Limited, told AFP.

The 2003 SARS outbreak in Hong Kong and China crippled tourism and brought business activities to a standstill.

"With any outbreak of pandemic, the airline sector is always a disaster area," Lun said, adding that Cathay Pacific, Hong Kong's flag carrier, suffered huge losses in 2003.

The latest fatality is thought to be among 14 human cases of H7N9 that were previously confirmed in China, and is the second person from Zhejiang province to die from the strain, with the other four fatalities coming from the commercial hub of Shanghai.

"With more human infections by the bird flu, some leisure travellers may try to avoid travelling during the time, particular to China," Davin Wu, an analyst at Credit Suisse, told Dow Jones Newswires.

Jackson Wong, investment manager at Tanrich Securities told the news wire: "The cases of H7N9 bird flu are rising and the death rate is high. Suddenly we've got a number of uncertainties at hand."

The first two deaths from the virus, which had not been seen before in humans, occurred in February but were not reported by authorities until late March. Officials said the delay in announcing the results was because it took time to determine the cause of the illnesses.

According to the World Health Organization (WHO), the animal source of the infection and its mode of transmission are not yet clear.

Experts are concerned that the virus appears to have spread across a wide geographical area, not only in Shanghai, but also the nearby provinces of Zhejiang, Jiangsu and Anhui.

On Thursday Chinese authorities culled poultry at a Shanghai market where the virus was detected in pigeon samples.

at/jms

http://www.globalpost.com/dispatch/news/afp/130405/hong-kong-shares-slump-bird-flu-worries