Why African investors should be worried about the coronavirus outbreak

As news of the coronavirus outbreak in China continues to dominate headlines, investors around the world are closely monitoring the situation to assess its potential impact on the global markets. Joining CNBC Africa to discuss the mix of global and local market news is Cobus Potgieter, Portfolio Manager at AIP Capital Management. Potgieter believes that while market reactions have been somewhat negative, there are reasons to be cautiously optimistic about containment efforts. He points out that the official in charge of containing the virus has significant experience from a previous outbreak and is well-qualified to handle the situation. Despite the upcoming Lunar New Year celebrations, which pose a risk for the spread of disease due to mass migration, Potgieter underscores that efforts like city quarantines demonstrate proactive measures being taken to prevent further outbreaks. Potgieter acknowledges that there will likely be costs associated with the outbreak, but emphasizes that the Western markets, in contrast to the Asian markets, seem to be less stressed about the potential impact. While there has been a noticeable pullback in Asian markets, reactions in the West have been somewhat muted. The analyst highlights the containment efforts and the lessons learned from past outbreaks as reasons for cautious optimism. However, the sheer scale of the Lunar New Year celebrations and the associated migration still present a significant risk for the potential spread of the virus. The broader implications of the coronavirus outbreak on global markets are yet to be fully understood, with investors closely monitoring developments for any signs of escalation or containment. As the situation continues to evolve, market participants will be assessing the economic repercussions and adjusting their investment strategies accordingly. The uncertainty surrounding the outbreak poses challenges for investors, who must navigate volatile market conditions while remaining vigilant for any developments that may impact their portfolios. In conclusion, while concerns about the coronavirus outbreak persist, there are indications that containment efforts are underway and that lessons learned from past outbreaks are informing current responses. The market's reaction to the outbreak has been mixed, with Asian markets experiencing more pronounced negative reactions compared to Western counterparts. Investors are advised to stay informed, exercise caution, and closely monitor market developments as the situation unfolds.