Today is Cinco de Mayo, but investors in Mexican securities probably won’t be whipping out their party sombreros and tequila any time soon. The dreaded swine flu (or H1N1 flu, for the politically correct crowd) is hitting Mexico hard, costing the country $100 million a day, according to some experts. This spells trouble for the Mexican Bolsa Index, which lost 3.3 percent when news of the flu broke on April 24, according to Robert P. Smith, founder of Turan Corporation, a firm specializing in trading emerging markets’ sovereign debt.
Smith says the Bolsa index “could fall 20% from its current levels due to confidence, investments, and Mexico’s reliance on tourism.” He compares the flu epidemic to the negative effects on Hong Kong markets during the 2002 SARS craze.
The flu’s economic impact on Mexico probably will be felt throughout the global trading world, but just how much is still to be determined. For some, maybe a margarita or two isn’t a bad idea after all.
Tags: Bolsa Index, Swine Flu
