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Mankind has finally become aware that the financial crisis is not the most dangerous thing in the world. The world has come across a new danger – the swine flu virus. Many explain yesterday’s reduction of stock markets with the threat of the epidemic of the new disease. The struggle against the distribution of the new virus has made a number of countries ban the imports of pork. Russia introduced a ban too.

Swine flu has become the most talked-about subject in only a couple of days. This disease was originally discovered during the 1970s, although it was believed that the virus was not dangerous to humans. However, a year-old child died of the disease in China in 1999.

Three incidents of the infection when the virus was transmitted to humans were reported in 2007 in the USA. This year the epidemic has taken a new international scale. The first incidents were registered on March 18 in Mexico.

Over 1,600 people have been infected with swine flu so far, over 100 people have already died of the infection. Infective episodes were reported in the USA, Spain and Canada.

Experts say that the new epidemic will slow down the USA ’s extrication from the crisis, which will automatically prolong the crisis in the rest of the world.

The epidemic may instantly destroy the glimmers of hope that have recently appeared in the United States at such heavy costs. The threat of the epidemic, the pesthole of which is located in Mexico, will inevitably affect the precarious consumer confidence which has just begun to recover in the country, analysts say.

A state of emergency push the government of the USA and other countries to take a series of measures that do not come together with the policy to boost the home demand.

If the epidemic continues to develop, there will be tough measures taken to restrict the movement of the labor force. A serious decline in the tourist industry in the countries of the American continent is also likely to occur.

It is worthy of note that the losses of the world economy from the previous global epidemic (bird flu) are evaluated at tens of billions of dollars.

A special governmental committee has been established in Russia to prevent the distribution of swine flu. The import of pork from the countries of the Caribbean region – Guatemala , Honduras , the Dominican Republic, Columbia, Costa Rica, Cuba, Nicaragua, Panama and Salvador – has been banned. The import of any type of meat and meat products from Mexico and three US states to Russia has been banned too.

The production of meat in Russia has grown by 8.7 percent in March of 2009. Therefore, the restriction of imports from Mexico, the USA and the Caribbean region will not affect the meat market of the Russian Federation.

To crown it all, the World Health Organization says that it is impossible to catch the infection via food. There has been no evidence found to prove the presence of the virus in pork.

BY

Darya Yurisheva

Apr 27, 2009
PARIS (AFP) — 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 3.51 percent 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."

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 dollars), 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 New York, light sweet crude for June delivery fell 2.59 dollars to 48.96 dollars. Brent North Sea crude fell 2.31 dollars to 49.36 dollars a barrel in late morning trade in London.

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 percent, Frankfurt stocks fell by 1.05 percent and the Paris CAC 40 index fell 1.83 percent.

Stocks in Tokyo edged up 0.21 percent but traders said they were held back by concern about the effects of the flu outbreaks. In Hong Kong they fell by 2.74 percent, and in South Korea by 1.05 percent.

"News over the weekend of a deadly flu outbreak is rocking financial markets," said Matt Buckland, dealer at financial spread-betting firm CMC Markets.

"After last week's gains many would have been looking to start locking in profits," he said, referring to recent rises in share prices reflecting some optimism that the global economic crisis may be flattening out.

"But clearly this (flu) news has the potential to become a rather serious development."

In Europe, shares in German airline Lufthansa were showing a fall of 10.60 percent and shares in Air France-KLM were down by slightly more than nine percent.
British Airways stocks were down 7.26 percent, shares in travel agency Thomas Cook 7.87 percent and in travel group TUI 5.52 percent.

Stock in cruise liner group Carnival showed a fall of 6.50 percent and Rolls Royce, which makes engines for aircraft and ships, saw its shares fall by 4.43 percent.
But companies making drug treatments were strong. GlaxoSmithKline gained 3.58, AstraZeneca 1.55 percent and Shire 1.21 percent.

In Tokyo, airline and tourism shares were hit by the swine flu worries. Travel agency H.I.S. tumbled 10 percent while Japan Airlines dropped 5.2 percent on fears that tourists and business travellers may cancel their overseas trips.
But Chugai Pharmaceutical, which sells the Tamiflu drug, climbed 14 percent.