Tokyo pharma stock market - week to April 2

Tokyo equities plummeted in the week to April 2 on profit-taking afterthe previous week's robust rally. The Nikkei 225 fell back 6.7%, and the Topix index also fell 5.2%, on selling by corporations to lock in profits for the annual book closings at end-March. Investors took to the sidelines toward the end of the week, awaiting the decision of the successor to Prime Minister Yoshiro Mori in the expected presidential election of the Liberal Democratic Party in mid-April, now that the budget for fiscal year 2001 has passed the Upper House.

Also, in view of the worse-than-expected March business sentiment survey by the Bank of Japan, the market waited for details of the emergency economic package to materialize in the first week of April, including measures to reduce financial institutions' bad debt. Broad sectors were sold, including technology stocks, which continued to be sensitive to weakness in the US markets.

The pharmaceutical index fell 5.3%, slightly out-performing the weak market. Major pharmaceutical stocks gave up most of the gains of the previous week. Eisai appeared to be the typical profit-taking target and fell 10.4%. Takeda declined 8.8% on the market's somewhat negative reaction to the news that Bayer has acquired 100% of Bayer Yakuhin in Japan (see page 7 this issue) by dissolving the joint venture contracts with Takeda (previously owned 14.6%) and Welfide (previously owned 9.8%). The market did not respond to positive news that Takeda discovered approximately 100 pharmaceutical target genes by utilizing the database of Human Genome Science (Marketletter April 2).