Wall St. cuts travel to deal with SARS
Quarantines await financial workers who return to U.S.
By David Weidner, CBS.MarketWatch.com
Last Update: 3:15 PM ET April 24, 2003
NEW YORK (CBS.MW) -- U.S. financial services companies are limiting travel and quarantining workers as they try to cope with SARS.
On Thursday, insurer American International Group (AIG: news, chart, profile) warned that it could experience a slight profit impact from its Asian business and that it was reducing travel, leaning more heavily on direct and telephone marketing in the region.
Several Wall Street banks have banned or curtailed travel to the parts of Asia and Canada cited by health officials as having the worst outbreaks of Severe Acute Respiratory Syndrome.
J.P. Morgan Chase (JPM: news, chart, profile) and Merrill Lynch (MER: news, chart, profile) have asked employees traveling to the affected regions to stay out of the office -- and in some cases work from home -- for 10 days after returning. Health officials say it can take that long for SARS symptoms to appear after exposure.
Spokesmen for the banks said the policy reflects guidelines issued by the World Health Organization and the Centers for Disease Control.
"We are, of course, following the recommendations of the leading health organizations," said Adam Castellani, a spokesman for J.P. Morgan. "Our employees are extremely important to us."
Other banks such as Lehman Bros. (LEH: news, chart, profile) and Morgan Stanley (MWD: news, chart, profile) have banned travel to some of the affected areas except in extraordinary cases.
"SARS-related downside risks seem to be cropping up everywhere in Asia except Japan," said Morgan Stanley economist Stephen Roach in a research note Thursday. "Hong Kong's economy has come to a virtual standstill. Singapore's government recently noted that tourist arrivals are down some 61% in the first 13 days of April. And Taiwan, Korea, and Malaysia are all bracing for SARS-related impacts."
Toyota Motor (TM: news, chart, profile) said Thursday it's considering evacuating almost all of its Japanese employees and their families from Beijing as fears mount over the spread of SARS there.
Toyota has 14 Japanese employees in Beijing and a total of 88 employees in China.
"We're considering an evacuation of Beijing employees, though we haven't announced the decision. If the situation worsens, we might in a few days tell employees in Beijing to evacuate," said Toyota spokesperson Keiko Sato.
New Zealand on Thursday became the first country to cut interest rates in part on fears that the spread of SARS could hurt economic growth.
In an unexpected move, that country's central bank cut its benchmark interest rate a quarter point to 5.5 percent, saying the disease and potential winter blackouts threaten to slow economic growth.
"While the economy is progressing as expected, recent dry conditions in some parts of the country, potential electricity shortages and the SARS virus add additional downside risks to the economic outlook, though at this stage we do not expect a large enduring economic impact," it said in a statement. |
