It is almost a year since the current Ebola outbreak was believed to have started, and despite considerable efforts from world health officials and nursing staff it shows no genuine signs of abating in West Africa. Even though the mortality rate for this outbreak is considerably lower than previous examples, this merely shows that the disease is evolving and adapting to the human body. The result of this is that while death rates have fallen, it will become increasingly difficult to cure the disease in time.
Ebola and the Financial Markets
While it seems frivolous to talk about Ebola in terms of financial impact, there is little doubt that an outbreak of this type will influence the course of the fiscal market. So although the original level of panic among investors may have quelled as the level of panic surrounding the recent outbreak has quelled, there are some who remain concerned about the immediate future of the equity and stock markets. Stocks have been particularly adversely affected, with a number of high profile companies having seen significant falls in price and value.
Take British Airways, for example, which saw its stock fall by more than 10% during the second and third financial quarters of 2014 and has yet to recover fully. The same fate befell Iberia, after a number of potential cases were reported in Spain. Other airlines have also been adversely affected, especially those that operate routes between Africa and the mainland of central Europe. This is despite that fact that there have been a minimal number of outbreaks in Europe and parts of UK and the U.S., as the threat alone has been enough to discourage investors to adopt an increasingly risk-averse approach.
The Last word for the Financial Markets
While focusing on airline companies and their associated stocks may offer a negative view of the financial markets, however, this only represents a small part of the story. There are other companies and industry sectors that have actually benefitted from the Ebola outbreak, for example, with firms that produce and distribute protective clothing and pharmaceuticals providing a relevant example.
Now that the outbreak is beginning to subside and with the World Health Organisation (WHO) predicting that it may even have ceased within six months, there is genuine hope that the financial markets will begin to recover some sort of equilibrium. This will provide a boost to investors everywhere, particularly those who have restricted their output and sought to consolidate their capital.