The Strategist

Louis Vuitton owner is not the richest man in the world anymore due to virus outbreak in China

01/22/2020 - 09:51

Bernard Arnault, owner of Louis Vuitton and Dior, has been holding the first place on the list of the richest people in the world for only three days. On Tuesday, his wealth declined by $ 3.7 billion. The reason is the outbreak of a deadly virus in China, which scared investors in the shares of European luxury companies.

Jérémy Barande
Jérémy Barande
The founder of Amazon's largest online retailer, Jeff Bezos, has regained leadership in the list of the world's richest billionaires. The owner of LVMH, Bernard Arnault, who topped the list last Friday, moved to second place.

The fortune of Arnault’s main competitor, the owner of Gucci and Saint Laurent Francois Pinault on Tuesday fell by $ 1.4 billion, to $ 37.5 billion, after the shares of his company Kering fell by 2.1%. 

Shares of European luxury companies, whose revenues are highly dependent on Chinese consumers, as well as companies from the tourism sector, airlines and casinos, became cheaper on January 21 due to investors' concerns about the outbreak of a new coronavirus in China. Earlier, the expert committee of the State Committee on Health of China announced that the disease is transmitted from person to person. According to recent reports, six people became its victims. Over 300 fell ill, mainly in China. Cases have also been reported in South Korea, Thailand, Japan and the United States.

The situation is complicated by the fact that at the end of the week, January 25, China will celebrate the New Lunar Year. “Millions of people will travel to their hometowns all over China, which makes the whole situation uncontrollable,” Margaret Young, an analyst at CMC Markets, told Reuters. “The virus can make people change their vacation plans and meet less often than usual on holidays. It is not yet possible to calculate to what losses this will lead. Investors tend to overreact to this,” said Chen Shi, fund manager for Shanghai Jade Stone Investment Management.