Pharma Stocks Outlook for the week – 23 to 27.01.2017
Pharma Stocks Outlook for the week – 23 to 27.01.2017
As Donald Trump takes over yesterday as the 45th US President, investors in the Indian market will remain wary about domestic pharmaceutical companies, keeping their stocks under pressure next week. There may be pressure on prices and margins for the sector in the US market, considering Trump's comments earlier. Although, we have to wait for more cues from his speech at his swearing-in yesterday, and his actions in the coming days. Analysts suggest investors should adopt a 'wait-and-watch' approach before taking aggressive bets on the stocks. Last week, Trump had voiced concerns over high prices of drugs in the world's largest market for medicines. One of the issues that would be watched by market participants would be the Republican Party's 'Border Adjustment Tax', which seeks to subsidies exports and tax imports, thus cajoling manufacturers to produce domestically. We believe that the proposed 'Border Adjustment Tax', which is a component of the Republican plan to revamp the corporate tax code, will be detrimental to the Indian pharma sector if passed in the current format. However, the analyst is skeptical about its passage as Trump himself is against the plan, which is one of the key aspects of House Speaker Paul Ryan's tax reform blueprint. On technical charts, Sun Pharmaceutical Industries Ltd, which gets nearly half of its revenue through exports to the US, is expected to be weak in the medium term. Lupin is expected to breakout on either side could lead to a sharp move. Other factors the market will keep an eye on next week will be corporate earnings for the December quarter. Wockhardt is scheduled to report its earnings next week. Market participants remain concerned about the Mumbai-based drug maker’s manufacturing facilities at Ankleshwar in Gujarat, and Waluj and Chikalthana in Maharashtra, which are under US Food and Drug Administration's import alert.
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Pharma Stocks Outlook for the week – 23 to 27.01.2017
( www.rupeedesk.in )
As Donald Trump takes over yesterday as the 45th US President, investors in the Indian market will remain wary about domestic pharmaceutical companies, keeping their stocks under pressure next week. There may be pressure on prices and margins for the sector in the US market, considering Trump's comments earlier. Although, we have to wait for more cues from his speech at his swearing-in yesterday, and his actions in the coming days. Analysts suggest investors should adopt a 'wait-and-watch' approach before taking aggressive bets on the stocks. Last week, Trump had voiced concerns over high prices of drugs in the world's largest market for medicines. One of the issues that would be watched by market participants would be the Republican Party's 'Border Adjustment Tax', which seeks to subsidies exports and tax imports, thus cajoling manufacturers to produce domestically. We believe that the proposed 'Border Adjustment Tax', which is a component of the Republican plan to revamp the corporate tax code, will be detrimental to the Indian pharma sector if passed in the current format. However, the analyst is skeptical about its passage as Trump himself is against the plan, which is one of the key aspects of House Speaker Paul Ryan's tax reform blueprint. On technical charts, Sun Pharmaceutical Industries Ltd, which gets nearly half of its revenue through exports to the US, is expected to be weak in the medium term. Lupin is expected to breakout on either side could lead to a sharp move. Other factors the market will keep an eye on next week will be corporate earnings for the December quarter. Wockhardt is scheduled to report its earnings next week. Market participants remain concerned about the Mumbai-based drug maker’s manufacturing facilities at Ankleshwar in Gujarat, and Waluj and Chikalthana in Maharashtra, which are under US Food and Drug Administration's import alert.
