Financial experts are predicting more hiccups across the local stock market as fears grow about the Delta variant of the coronavirus.

The more contagious variant of the COVID-19 virus has spread to more than one hundred countries, including Jamaica’s main trading partner, the United States. It’s now considered the dominant strain across the US as well as other territories including India, where it was first identified, and the United Kingdom.

Just last week, the US stock market dropped sharply as investors worried about the economic impact of the variant which the World Health Organization has labelled the fastest and fittest of all variants currently.

Speaking on Taking Stock with Kalilah Reynolds, Business Writer at the Jamaica Observer, David Rose said it’s only a matter of time before similar fears reach more countries including Jamaica. To date the Delta variant has not been confirmed in Jamaica; however, Health Minister Dr. Christopher Tufton has cautioned the public to assume it has already reached local shores based on travel patterns of citizens and tourists to and from those countries which currently are being challenged with it.

“[Last] Monday the NASDAQ had its worst day for 2021 and that was because of increased fears of Delta pushing countries back into further lockdowns which has already started to occur in various parts of the World [including] Australia, UK, some parts of the US… the reality is these variants they’re just coming differently each time,” said Rose.

Business Writer at Jamaica Observer, David Rose.

Rose reasoned that the Delta virus as well as its subvariant, Delta Plus, present new uncertainties to economic recovery, especially as it appears vaccines alone may not foster greater levels of normalcy. 

“Even though we have these vaccines at the moment, the problem that we’re facing is that some studies are suggesting you might need to take extra shots of the vaccine so third world countries like us are going to be held back even further if Delta and new variants continue to wreak havoc on the reopening of our economies,” said Rose.

“The US is reopened fully but Jamaica is still in a delicate space,” he added.

Another surge in local cases recently forced the Government to go back on relaxed measures that were initially due to end on August 10. Several approved events are now being reconfigured to adhere to the nightly curfews and gathering limits.

Jamaica’s Prime Minister, Andrew Holness, has also put the country on alert for tighter restrictions to help stave off the impending third wave. 

At the same time, Rose said the Delta variant has also caused investors to be fearful about more rising prices for goods and services.

“Delta is of great concern because we were ravaged last year and it’s very hard for prices to come back down after they’ve gone back up, especially with the risk of potential measures which will force companies to maintain those prices or increase them again and this also puts into the equation again that Delta might cause inflation just because of the risks of businesses closing back down,” said Rose. 

Meanwhile, Investment Research and Sovereign Risk Analyst at JMMB Group, Leovaughni Dillion said the real risk revolves around the likelihood that more variants of the virus will continue to manifest and provide more challenges to recovery.

Investment Research & Sovereign Risk Analyst at JMMB Group, Leovaughni Dillion

In addition to Delta, there are also the Alpha, Beta, Gamma, Epsilon and Lambda strains.

“As long as it’s out there, it will become more and more deadly and more and more unknown as it keeps mutating so that to me is one of the bigger risks than the current variant. [The focus should be on] what will happen in the future if we don’t achieve some level of herd immunity in the global population,” argued Dillion.

Just about 10% of Jamaica’s targeted population has so far been vaccinated against COVID-19 with plans to increase that figure substantially over the next two months with an additional 1.4 million doses of single and double dose vaccine brands being expected between now and September 30.

Catch THE ANALYSTS on Taking Stock with Kalilah Reynolds.  New episodes premiere Tuesdays at 7pm on YouTube and kalilahreynolds.com

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