● On January 30, following the second meeting of the Emergency Committee on the novel coronavirus (nCoV), the World Health Organisation (WHO) has declared the nCoV outbreak as a Public Health Emergency of International Concern (PHEIC).

- The WHO emphasised that the PHEIC was declared mainly due to concern over the possibility for the virus to spread to countries with weaker health system and which are incapable of dealing with the outbreak.

- It stated that the number of cases in other countries excluding China (9,356 cases, 213 deaths) remained relatively small (124 cases, 22 countries, 0 death), with eight cases of human-tohuman transmission, specifically in Germany, Japan, Vietnam and the US.

● Though the declaration of PHEIC does not come with the force of law, it provides the WHO with the mandate to facilitate efforts in containing the virus globally.

- Thus far, no restrictions on travel and trade were recommended by the WHO. Countries were advised to adopt evidence-based policies, combat misinformation, enhance data sharing, and cooperate with other nations and international institutions.

- Of note, in the past decade, the PHEIC has only been triggered for five times: H1N1 (2009), polio (2014), West Africa's Ebola (2014), Zika virus (2016), and the Kivu Ebola outbreak (2019).

● Compared to the 2003 SARS outbreak, the nCoV’s PHEIC announcement came in relatively late.

- SARS: PHEIC was announced three weeks after the WHO was alerted of the outbreak, with 1,400 cases and 49 deaths recorded at the time of announcement. Containment of the virus was achieved after another 15 weeks.

- nCoV: PHEIC was announced five weeks after the WHO was alerted of the outbreak, with 7,834 cases and 170 deaths recorded at the time of announcement. Following past trend and assuming improved technology and experienced public healthcare officials, we view that the virus may be contained in another 10-20 weeks.

● Reflecting heightened worries over the severity of the outbreak, investors have increasingly shifted to risk-off mode.

- FBM KLCI plunged by over 4% since the outbreak emerged, while the USDMYR depreciated by 0.7% after the first case was detected in Malaysia on January 25.

- With eight nCoV cases reported (8th largest globally), we maintain our view that the government may inject a stimulus package of RM5-10b as early as mid-February to provide immediate relief to the affected sectors, in cognisant with Finance Minister Lim Guan Eng’s statement on the government’s readiness to act.

Source: Kenanga Research - 31 Jan 2020