Similar to new rules in financial reporting (eg. IFRS16 on operating lease starting Year 2019), it could have significant change to financial reports but it is one-time adjustment, especially in year 2019. Relative trend after the change should be comparable when an investor compares with 2019 as a new base. IFRS16 makes the analysis more complicated, eg. when Breadtalk (SGX: CTN) shows debt and cashflow are increasing, higher debt could be due to combined factors of actual debt increase and also due to operating lease (change in accounting definition)
So, assuming China government excludes those “no symptom” (despite tested positive) from # infected from Coronavirus definition, we should see a sudden dip on date of policy change, rather than seeing consistent downtrend for 1 week. Of course, if the authority is smart enough to distribute the changes over a period of time, then it is different story.
The worry is not on false downtrend (# infected for last 1 week) due to policy change (possible for 1 day drop, unlikely for entire 1 week drop). The main concern is incubation period of 14 days for those infected before lunar new year (5 millions people travel in/out Wuhan with a population of about 11 millions, Wuhan is heart of China, main junctions for travellers of 9 other China provinces – eg. high speed railways). About 1 out of 3 Wuhan people traveled before Chinese New Year, 23 Jan 2020 (when Wuhan city was locked down) + 2 weeks incubation = 6 Feb 2020 (just nice coincide with slowdown in growth rate of # infected), therefore we see significant downtrend in cases now as infection is mainly within Hubei.
For 5 Millions Wuhan people who traveled out, some have infected other cities in China and also other countries including Singapore, therefore the trends in these countries are still growing as incubation of 14 days is counted from after Chinese New Year. Singapore has banned travelers from China from 1 Feb, therefore we could foresee a downtrend near to or after 14 Feb due to end of incubation period.
However, when people to go back to work after lunar new year break, eg in China (from Feb 10) and in Singapore (from Feb 3), we worry there will be second peak. At the end, these 2 factors will be combined (higher drop due to past isolation measures vs possible increase due to workforce coming back), showing a net result, if -2+1, likely will still show a mild downtrend.
Again, we need to monitor the number of Coronavirus daily, up and down is similar to stock market prices, a combined effect of many factors, not just 1.
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