The global spread of coronavirus from China this week is wiping out billions of U.S. dollars of stock market valuations of companies from the country and inflicting as yet hard-to-estimate damage to consumer spending growth in the world’s No. 2 economy.
The virus has spawned 1,300 cases and let to 41 deaths worldwide at a time of peak Chinese New Year travel and spending. Chinese health officials are facing criticism for the early handling of the disease, hurting the credibility of official reports and information about the deadly illness. To try to curb the spread, China has reportedly imposed travel restrictions on more than a dozen cities and 20 million people.
Though global stock markets have a record of shaking off health scares, that didn’t happen with many publicly traded China businesses listed in the U.S. on Friday, when companies potentially hurt by the spread of coronavirus closed lower. Mainland exchanges were closed for the Chinese New Year, which is officially today.
Big decliners included travel booking companies such as Trip.com, formally known as Ctrip, the country’s largest online travel booking agency. Its shares fell 6.9% on Friday and have lost about 18% of their value in the past week. Trip-backed Tuniu fell 2.2% to $2.20. Tuniu’s stock once-mighty stock traded above $20 in 2015.
Among Chinese airlines, government-controlled China Eastern fell 1.4% on Friday to its lowest since October. Hotel chain management firm Huazhu, led by billionaire Ji Qi, lost 18% of its value in the past week, including a 2.5% drop on Friday. Retail-linked stocks were also under pressure. Starbucks coffee chain rival Luckin plunged by 8.6% on Friday. China e-commerce heavyweight Alibaba fell 5.7% last week, including a 2.5% swoon on Friday.
And among multinationals with relatively large exposure to China’s consumers, Yum! China fell nearly 1% on Friday and Starbucks lost 1.8%.
–Follow me @rflannerychina