Avian Influenza Outbreak: Investment Strategies Emerge Amid Fears of Global Economic Impact
A significant outbreak of avian influenza in Europe could have far-reaching consequences for various industries, prompting investors to reassess their portfolios. Deutsche Bank's report highlights the potential winners and losers, with real estate companies, health care providers, and telecommunications firms expected to perform well in a pandemic scenario. Meanwhile, airlines, luxury goods manufacturers, and banks may suffer significant losses.
Key Takeaways:
- Real estate companies like Brixton and Slough Estates are likely to outperform in a pandemic scenario due to their non-retail property and lower exposure to risk.
- Shares of Brixton, Britain's biggest industrial landlord, are expected to outperform the broader market as investors seek safety, quality, and yield.
- Slough Estates, owner of five of the largest industrial parks in Britain, is also likely to outperform due to its diversified portfolio.
- Air France-KLM, Lufthansa, and British Airways could be among the worst-hit shares in an outbreak if governments impose travel restrictions.
- A "moderate" to "severe" human outbreak of avian influenza could cut Europe's gross domestic product by 2 percent to 4 percent, according to Deutsche Bank estimates.
- The World Bank has estimated that a pandemic among humans could cost the global economy $800 billion annually, which is 2 percent of global output.
Statistics:
- 91 deaths attributed to avian influenza in Asia as of the report's date.
- 28 countries have reported avian influenza outbreaks, including seven in the European Union.
- 14 million to 70 million deaths potentially resulting from a "moderate" to "severe" human outbreak.
- 2 percent to 4 percent potential reduction in Europe's gross domestic product.
- $800 billion estimated annual cost of a pandemic among humans to the global economy.
Sources:
- Deutsche Bank report
- Deutsche Bank News (no date mentioned)
- World Bank report (no date mentioned)