Japan stock market week to Nov 6, 2006

13 November 2006

Tokyo saw a virtually flat market in the week ended November 6 (four trading days because November 3 was a national holiday in Japan). The Nikkei 225 was up a marginal 0.1%, maintaining the 16,300 level, while the Topix index edged down 0.2%. The sluggish performance was caused by broad concerns about the direction of the US markets and economy. Players were also disappointed by first-half earnings reports from select Japanese companies which presented a cautious outlook for the full year against the previous expectation by investors for the upward revisions of the full-year projections.

The pharmaceutical index inched up 0.1% performing in line with the market. Kyowa Hakko rose 2.5% after it reported stronger-than-expected first-half earnings thanks to a smaller-than-anticipated year-on-year decline in major products and cost controls, overcoming the discontinued marketing in March 2006 of the antibiotic Itrizole (itraconazole) originated by Janssen Pharma (14.2 billion yen [$119.3 million] in the previous year's first half). Operating income leapt 18.4% to 14.6 billion yen, above the target of 11.0 billion yen. Revenue in Japan of the anti-hypertensive agent Coniel (benidipine) fell 4.3% to 13.4 billion yen but exceeded the plan of 12.4 billion yen, reflecting the company's strong measures to defend the drug against generic competition.

Santen went up 2.3%, responding to its better-than-initially-projected first-half results on growth of its major prescription ophthalmic drugs in Japan and overseas. Turnover rose 3.2% year-on-year to 51.4 billion yen and operating income edged up 0.2% to 12.1 billion yen, exceeding the plan of 10.2 billion yen. Japanese sales of Cravit (levofloxacin) for the treatment of bacterial conjunctivitis increased 2.0% to 7.2 billion yen and turnover of Hyalein (pemirolast potassium) for the treatment of corneal disease expanded 7.6% to 9.0 billion yen.

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