In their war against the coronavirus and foreigners’ exodus, smaller markets might follow the Philippines in shutting down their bourses, market participants say.

The nation’s move to close its $188 billion equity market until Thursday has already been followed by Sri Lanka. In both cases, the reason given for the closure is to help contain the spread of the coronavirus, which has already infected more than 174,000 globally and killed 7,000.

“Smaller emerging markets including Jakarta would be the most likely to suffer the same fate,” said Jeffrey Halley, a senior market analyst at Oanda Asia Pacific Pte. in Singapore. “Their virus containment approach has been slow and piecemeal.”

For developed nations with virus-containment measures and business continuity plans in place, market shutdowns are not necessary, he added.

Indonesia Stock Exchange said they have no plan yet to shut equities trading and would monitor today’s development. The country banned short selling in stocks earlier this month.

Shutting markets during times of crisis is extremely rare but not without precedents. America’s stock market closed for almost a week after the 9/11 terrorist attacks in 2001, while Hong Kong halted trading in the wake of the Black Monday crash in 1987. Greece shut its stock market for about five weeks in 2015.

“There have to be plans similar in nature by regional markets” where new infections are gathering pace, said Sameer Kalra, founder of Target Investing in Mumbai. “The move is good to contain the virus spread since exchange buildings are hugely populated areas, but it may put a lot of jobs at risk.”

While a shutdown to avoid financial crashes can severely erode confidence in a nation’s capital markets, investors might be more forgiving this time around, according to Thomas Hayes, chairman at Great Hill Capital in New York.

“If it is part of a quarantine strategy to avoid the spreading of the virus, that may be viewed with greater understanding,” Hayes said. — Bloomberg