The Sars outbreak of 2003 taught Asian investors that when the disease passes, there are profits to be made. So for many, the coronavirus scourge is seen as cause to reposition funds in expectation of a rebound.
But which sectors and stocks can be expected to come back the strongest? There are some obvious candidates: the share prices of airlines, restaurant chains and businesses that require people to be in proximity have been hit particularly hard as cities and factories have been shut down.
If the Sars epidemic is any guide, the valuations of companies in these sectors should bounce back once the crisis is over. Cathay Pacific’s share price, for example, nearly doubled between its 2003 nadir and its peak in mid-2004 — by which time most people were confident that the virus had been beaten.