Zika

A quick word on the Zika virus. The name "Zika" refers to a forest just outside Uganda's capital, Kampala, where the virus was discovered in the late 1940’s. It has since been identified in other parts of Africa, Southeast Asia and the Pacific islands. The spread of Zika is similar to that of the chikungunya virus: Once it is exposed to a dense population, aided by the right factors and conditions, it spreads rapidly. Concerns about severe birth defects associated with the Zika virus are not only understandable, but also are aggravated by the difficulty in detecting infection. Several studies are underway to conclusively prove the link between Zika and microcephaly, a congenital disorder associated with small infant head size and neurological impairment. Studies in Brazil have already shown a strong correlation. There is also evidence linking Zika to autoimmune disorders such as Guillain-Barre syndrome, but more findings will likely emerge over the coming months.

However, hard facts are difficult to come by and the media are not being proportionate in their reporting. It may well be proved to be very serious but the BBC colouring the whole of Brazil in crimson red on their graphics is hardly helpful. One recent report suggests that up to last week there were only 270 confirmed cases of microcephaly in Brazil and only 6 of those had Zika. 

There are also some suggestions amongst the Twitterati that there may be a story drawing in the mandatory Tdap vaccination for pregnant women in Brazil, (became mandatory in 2015). Tdap is manufactured by Glaxo and Sanofi. There also seems to be growing evidence that the disease can be sexually transmitted. I’m not taking a view on any of this. I’m simply keeping an open mind and question how a 65 year old virus suddenly becomes a threat to human health on a trans-continental scale. Mossies rarely travel far.

The WHO officially considers the Zika viral outbreak, which is currently plaguing the Americas, to be a global emergency. Yesterday’s announcement followed an extraordinary meeting to assess the extent of the infection. Labelling the virus an international health emergency improves the chances of getting it under control, thanks to an anticipated influx of personnel, resources and expertise spurred by the WHO designation. The emergency decision could even accelerate efforts to develop a vaccine, though this will not happen immediately. The virus is spreading rapidly through South and Central America and could lead to 4 million new cases this year. At least 20 territories, including Panama, Guatemala, Barbados and Puerto Rico, have registered local transmission of the virus. The disease, which is spread by the Aedes mosquito, produces no symptoms in the majority of cases and only mild symptoms in others. 

 There will be an economic impact. Containing and managing an outbreak is expensive, as is dealing with large numbers of dead and infected. This can lead to severe disruptions in trade, accompanied by enhanced screening measures to prevent the transmission of the virus across borders. Developing treatment, cures and vaccines requires huge investment, as seen in the recent Ebola outbreak in Africa. And then there is the loss of productivity resulting not only from sickness but those refusing to work and those taking time off to care for the infected. If the disease is neither deadly nor debilitating, however, the loss of economic productivity from death or incapacitation is low.

Mossies are a fact of life in the Tropics and whatever personal protective measures individuals take its usually a case of minimising bites rather than eradicating them. Zika is not the only mosquito-borne disease that is endemic to the Americas; dengue, chikungunya, West Nile and malaria have all taken hold, (before I was posted to Belize I came out of the Med Centre feeling like a pin cushion although at the time, the last thing we were worried about in the jungle and in the rivers were mossies. The Green Tree Viper, the Fer de lance, the Jumping Viper, the Bullet Ant, African Bees, bitey spiders too numerous to mention and scorpions; nice). Without mass eradication efforts, similar to those carried out in the mid-20th century, it is likely that several mosquito-borne diseases will remain endemic to Latin America. The difficulty in controlling these other diseases is a strong indicator that controlling Zika will be equally difficult. There are significant costs associated with constantly combating and treating mosquito-borne diseases, costs that are hard for cash-strapped countries to shoulder. In fact, the prevalence of such diseases in the tropics has historically hindered the economical emergence of countries in that climate range.

The biggest geopolitical effect of this outbreak may not be seen until 18 years or more after the current outbreak. Fear of Zika and microcephaly has to potential to lead to a decrease in pregnancies in the region, possibly assisted by political initiatives. The governments of El Salvador, Columbia, Jamaica and Honduras are already telling women to delay pregnancy until the virus is under control. Unlike other countries and regions that are expected to face demographic crunches in the next two decades, much of Latin America still has a healthy demographic curve, with a large, young population base. A rapid halt in population growth, caused by something akin to Zika, would threaten the continued productivity associated with sizable Latin American labour pools. This has the potential to hasten regional decline in decades to come although, I do emphasise, no one seems to yet have real handle on this thing regardless of what the newspapers are saying..

Ebola Virus; Risks

Click  to view interactive version

Click to view interactive version

Ebola, or Filoviral hemorrhagic fever (FHF), is a scary, scary thing. One minute the victim thinks he has a mild dose of flu, the next his insides are turning to mush. It usually has a fatality rate north of 90%, (this particular strain is around 56%), and is one of the most deadly and virulent known viral diseases. Worryingly, it is on the move. The current outbreak, which started in February in Guinea and is the largest in history, has claimed some 729 lives out of 1323 known cases so far. It has struck in  Guinea, Liberia, and Sierra Leone and has now killed a 40-year-old man who travelled through a Lagos airport. The incidence of Ebola viral diseases (EVD) has been growing in the past 20 years and has been striking this year in previously unaffected areas in West Africa rather than Central Africa which has been the norm. 

Trying though, to work through the shrill media headlines is becoming more tricky as the media herd sense a “big new story,” to fill their endless airtime. The reality is that while its obviously not much of a winner for the people unfortunate to catch the virus, the probabilities of a pandemic remain low.

The World Health Organisation are obviously on the front foot in terms of the current outbreak which they describe the epidemic trend in their latest update as “precarious,” with 122 new cases between the 24th and 27th with 57 deaths.

The death reported in Lagos is unhelpful. The individual arrived there by air on the 20th via Togo and Ghana. 59 contacts, (15 airport staff and 44 from the hospital), have been identified so far. More are probable and the movement of the disease to Nigeria is a significant development.

The World Health Organisation doesn’t yet recommend any travel or trade restrictions to Guinea, Liberia, Sierra Leone or Nigeria nor does our own National Travel Health Network ; (obviously they’ve had a letter from a gentleman in Lagos telling them everything there is fine). The default position to manage these things is to tell everyone not to panic while quietly ramping up surveillance and biorisk security. Our own Foreign Office are masters at this; “This is not an issue that affects the UK directly. We have experienced scientists and doctors – the Royal Free Infectious Disease Unit, the Liverpool School of Tropical Medicine and the London School of Hygiene and Tropical Medicine – and a lot of experience of dealing with dangerous diseases. The risk of this disease spreading fast in the UK is much lower because of that.” 

That though is very probably the case. Previous outbreaks have been characterised with an increasing localised death toll but which has turned down steeply as precautionary measures, principally health worker biosecurity and patient isolation, have been deployed. The disease usually starts in rural areas where the population have close contact with wildlife and burial customs usually include handling the dead. With underequipped clinics and porous borders it is unsurprising that it spreads. In recent years, the disease has failed to get a hold in urban areas where the threat of animal to human transmission is much lower and medical facilities more advanced. Also, the disease is not highly contagious, it’s simply deadly if you are unlucky.

 The disease has an incubation period of between 2 and 21 days but one bit of luck is that people infected with Ebola cannot infect others until they have the symptoms. This makes it markedly easier to track and control. Fortunately, one of the few areas of slick international cooperation in the world appears to be that of disease control and the WHO and CDC appear to be all over this one. Nonetheless, many humanitarian organisations are pulling their people out of the at-risk areas and travel restrictions are beginning to come into force at the local level. My favourite travel advice incidentally is from the CDC who helpfully recommend that “travellers to these areas avoid contact with blood and body fluids of infected people to protect themselves.” Seriously? 

In summary, the pandemic risk of a virus is the result of its ease and rate of transmission which makes Ebola a very different kettle of fish to say, the Spanish Flu epidemic after the Great War. While it is possible that a case could enter the UK, Europe or the US, expert virologists expect the worst that can happen would be clusters of infection and death that would be quickly and efficiently contained. Just to give you some perspective, AIDS has killed 30m people so far and Ebola has, so far at least, killed less people than does Malaria every two days. 

Market impact is likely to be similar; localised hits on companies that have specific trading or manufacturing links with these areas but which are unlikely to have an impact at the broader asset class level. As it is, equities are so fragile they are quite capable of displaying the symptoms and characteristics of the Ebola virus on their own without any outside help.

 

If you want something to worry about which is far more likely to affect British and American citizens then consider this flesh eating nasty in Florida…………

There, as the old head of the anti-terrorist squad George Churchill-Coleman used to say on the news after PIRA had blown up another London postcode, “There is no cause for alarm..”