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Coronavirus fears sweep Asian markets, extending global sell-off

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Some Singapore-listed companies with China links hit by heavy sell-off

Coronavirus fears swept across Asian markets, extending a global sell-off as the disease claimed more lives, sickened people around the world and threatened to derail a fledgling economic recovery.

The first trading day after the Chinese New Year holiday saw Singapore stocks shed more than 2.9 per cent at one point, before ending 1.8 per cent lower yesterday.

Japan lost 0.6 per cent, South Korea 3.1 per cent and Malaysia 1.35 per cent, while Jakarta and Thailand also closed lower.

Earlier, the Dow Jones Industrial Index plunged 1.6 per cent on Monday - its worst showing since October last year.

Financial markets in Hong Kong, China and Taiwan remained closed yesterday.

The wildcard is not the fatality rate, but how infectious the Wuhan virus is, and how successfully this outbreak can be contained, Citi Research analysts pointed out.

"During the Sars episode, it was not until new cases started to taper off in late April 2003 that the Hang Seng Index found a trough," they said.

A number of Singapore-listed companies that have direct ties with China were heavily sold off yesterday. Sasseur Reit tumbled 10.29 per cent after it announced the temporary closure of four outlet malls in China in response to the spread of the virus.

CapitaLand fell 4.88 per cent, Yangzijiang Shipbuilding more than 5 per cent, and Wilmar International 3.66 per cent. Mapletree North Asia Commercial Trust, which has office properties in Beijing and Shanghai, lost 5.65 per cent.

Gaming plays and airlines were also among the casualties, as tourism spending accounts for about 7 per cent of Singapore's gross domestic product (GDP). Genting Singapore fell 3.85 per cent, while Singapore Airlines lost 2.95 per cent.

"A 50 per cent drop in Chinese tourist arrivals could knock up to 3 percentage points off the most vulnerable countries' GDP. The impact will be even greater if the virus deters tourists from other countries," Capital Economics senior Asia economist Gareth Leather said.

CMC Markets analyst Margaret Yang attributed the equities sell-off to "uncertainty we are facing in terms of economic impact caused by the virus".

"We haven't seen the peak yet. We need to see the turning point before sentiment can improve," she said.

"Tourism and retail sales will get hammered, not only in China, but across South-east Asia. Commercial and retail properties are vulnerable because part of their rental income is from malls, and as the number of tourists drop, their business may be hit."