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Fears over worsening swine flu

THE threat of a swine flu pandemic kept global businesses and investors on edge yesterday, disrupting travel plans and sending stock markets down on fears the outbreak could worsen and cause more economic misery.

Days after news of the deadly virus outbreak in Mexico, stocks of companies in the travel and tourism industry were being hammered on fears that worried travellers would stay home.

Across Asia, tour groups abandoned more holiday jaunts to the country amid a series of government warnings. Airports from Indonesia to Australia tightened their screening of travelers.

In Moscow, the United States Embassy issued a statement saying there was "no basis" for Russia's decision to bar pork imports from three US states, saying the disease was not spread through meat products, and that normal trade would soon resume.

Much of the fallout hit financial markets jittery about the future, as opposed to the real economy. Shares in Europe's largest airline Air France-KLM continued the sharp drop begun on Monday, falling an additional 2.85 percent to 8.16 euros (US$10.65) yesterday.

Shares in European hotel giant Accor SA, which operates nine Sofitel and nearly 1,000 Motel 6 hotels in the US, slid 4.35 percent to 30.10 euros.

Shares in Euro Disney, which yesterday said its net loss nearly doubled to 85.4 million euros in the fiscal first half, were down 9.8 percent at 3.60 euros.

The disease, while still largely corralled in North America, has spread rapidly in recent days with the World Health Organization raising its global alert level and moving closer to declaring a flu pandemic as infections cropped up in Europe.

With the world economy seen shrinking 1.3 percent this year by the International Monetary Fund, swine flu could add more stress.

"This certainly could exacerbate the recession," said Sherman Chan, an economist with Moody's in Australia.


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