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03/25/2006:

"Bear Stearns warns against airline stocks due to 'imminent' bird flu"

Investment bank Bear Stearns has advised investors to start dumping airline and retail stocks in favour of blue-chip utilities as a hedge against bird flu, warning that a full human pandemic of the H5N1 virus could set off the worst global stock market crash since the 1930s.

In the first detailed study of its kind, the US bank suggests buying Scottish Power, biotech companies such as Amgen and Medimmune, and the US health group St Jude Medical Inc, citing them as the sort of companies that would hold up well or even rise in the first phase of a pandemic.

"We believe the imminent arrival of bird flu in the United States will bring this potentially devastating disease back into the limelight," said the report. If bird flu turns out to be a 'worst event in 100 years' then extreme risk analysis suggests it could push the market down 46pc over a 12-month period. "We believe investors should consider a basket of stocks to inoculate their portfolio from this source of risk," it said.
telegraph.co.uk