13/05/2025

BIZ & FINANCE TUESDAY | MAY 13, 2025

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KARACHI: Pakistan stocks surged yesterday, with the benchmark index opening 9% higher after a weekend ceasefire agreement with the country’s arch rival India. US President Donald Trump announced the truce after four days of missile, drone and artillery attacks by India and Pakistan which killed at least 60 people and reached deep into the territory of both countries. The benchmark KSE-100 Index opened at 117,104.11 points, up 9,929.48 points, or by 9.26%. “Today’s sharp surge in the stock market stems from a powerful convergence of bullish triggers that have swiftly turned investor sentiment from fear to opportunity,” Sana Tawfiq, head of research at Arif Habib Ltd, Pakistan’s largest securities brokerage, told AFP. The jump also came after the International Monetary Fund (IMF) on Friday approved a loan programme review for Pakistan, unlocking around US$1 billion (RM4.4 billion) in much needed funds and greenlighting a new US$1.4 billion bailout despite India’s objections. “This positive shift is reinforced by the IMF’s dual approvals, providing both critical funding and international validation of Pakistan’s reform path,” Sana added. – AFP Pakistan stocks surge after ceasefire with India Indian pharma stocks fall as Trump moves to cut US drug prices MUMBAI: Indian pharma stocks fell 1.6% yesterday, bucking broader market gains, after US President Trump said he would cut drug prices by 30%–80% to match other wealthy nations. Trump said he would sign an executive order this week to pursue“most favoured nation”pricing. The US currently pays nearly three times more for many prescription drugs, though Trump offered no implementation details. Several Indian drugmakers earn a significant share of their revenue from North America by selling low-cost generic versions of newer drugs. Thirteen of 20 stocks on the pharma sub-index fell, led by Sun Pharma’s 4.6% drop, even as the Nifty 50 gained 2.5%; Zydus Life and Cipla also declined 0.7% each. Divi’s Laboratories and Lupin fell 2% each, while Biocon lost nearly 3%. “A price cut of prescription drugs by 50% or more would hurt the US formulations market, more on the branded size due to immediate potential impact, while over the medium term it will also impact generics as it reduces the potential market size of new drugs,”said Shrikant Akolkar, an analyst at Nuvama Institutional Equities. – Reuters Norway’s wealth fund excludes Israeli firm on ethics grounds OSLO: Norway’s sovereign wealth fund, the world’s largest with assets of around US$1.8 trillion (RM7.7 trillion), has excluded an Israeli group on ethics grounds because it supplies fuel to illegal settlements in occupied Palestinian territory. The Norwegian central bank, which manages the fund, said late on Sunday that it had divested its holdings in Israeli group Paz Retail and Energy. Paz owns and operates filling stations in nine Jewish settlements in the West Bank, thereby supplying them with fuel, according to the bank’s Council on Ethics, an advisory body that provides investment guidance for the fund. Several of the settlements have been built “far inside occupied Palestinian territory and are linked to Israel by dedicated access roads”, the Council said. It said that by operating the infrastructure, Paz was “contributing to (the settlements’) perpetuation”, leading to an “unacceptable risk that the company contributes to serious violations of the rights of individuals in war or conflict”. – AFP

Ishiba open to more economic support measures Ishiba (left) and Chile’s President Gabriel Boric (right) at the Japan-Chile summit meeting at the Prime Minister’s Office in Tokyo. – AFPPIC

Japan’s service-sector sentiment worsened in April, according to a government survey released on the day – the latest sign US tariffs were beginning to take a toll on the fragile economy. The strife was evident in Japan’s automobile sector, with Mazda reporting a 45.1% drop in net profits for the fiscal year that ended in March, and holding off on disclosing earning estimates for the current year through March 2026. Despite these signs of weakness in the economy, Japan’s dire finances limit scope for big spending or permanent tax cuts. Japan’s public debt, at double the size of its economy, is the largest among major countries due to decades of heavy spending including for social welfare costs of a rapidly ageing population. The cost of funding the huge public debt is expected to rise as the Bank of Japan normalises monetary policy by tapering its bond buying and raising short-term interest rates. Super-long bond yields rose to a more than two-decade high this month due in part to investors’ concern that Japan’s fiscal state may worsen further, as talk of tax cuts among politicians gather steam ahead of an upper house election slated for July. – Reuters

“It’s important to reach out to people hardest hit,” rather than taking blanket measures, Ishiba told Parliament when asked by an opposition lawmaker whether the government could consider cutting the consumption tax rate for food items. While some countries have resorted to tax cuts focusing on food items, Japan already has a fairly low tax rate, a rapidly ageing population and a dire fiscal state, Ishiba said. “It’s easy to talk about cutting tax. But it’s irresponsible not to also discuss more difficult issues” such as how to pay for Japan’s rising social welfare and pension costs, he said. Japan’s consumption has been stagnating even before the steep tariffs announced by President Donald Trump in April. Analysts polled by Reuters expect Japan’s economy to have contracted for the first time in a year in the first quarter. The first-quarter preliminary gross domestic product (GDP) data is due on Friday. A total of 826 companies went under in April, up 8.7% from year-before levels and increasing for the 36th straight month, a survey by private think tank Teikoku Databank showed yesterday.

TOKYO: Japanese Prime Minister Shigeru Ishiba said yesterday the government was ready to take further steps to cushion the economic blow from higher US tariffs, but signalled caution on cutting the country’s consumption tax rate. Opposition and some ruling party lawmakers have called on the government to cut Japan’s consumption tax rate, set at 10% except for food items that are charged 8%, to help households cope with the rising cost of living. Speaking in Parliament, Ishiba said the government “won’t hesitate to take additional measures” to ease the pain on the economy from higher US tariffs. But he said any steps must be targeted to households hardest hit rather than those covering the broad population, suggesting that a cut to Japan’s consumption tax rate was unlikely. o Japan premier brushes aside lawmakers’ calls for consumption tax cut

Zepbound outperforms Wegovy in weight loss trial NEW YORK: Eli Lilly said on Sunday its drug Zepbound was superior to Novo Nordisk’s Wegovy across five weight-loss targets such as reducing waist circumference, citing data from a head-to-head trial. comparing the wildly popular medicines, and gives Lilly more firepower as it seeks to gain wider insurance coverage in an obesity drug market estimated to reach more than US$150 billion annually by the next decade. The trial also showed that treatment with Zepbound achieved a superior average waist circumference reduction of 18.4cm, while those treated with Wegovy saw an average reduction of 13cm.

While Lilly’s drug mimics two gut hormones to help reduce weight, Wegovy has a single mode of action. US approvals for Zepbound and Wegovy were based on separate trials in which Lilly’s drug helped patients lose more than 22% of their weight after 72 weeks, while Wegovy led to 15% weight loss after 68 weeks. – Reuters

It comes days after CVS Health’s decision to drop Zepbound from some lists of medicines it covers for reimbursement, instead favouring Wegovy. Zepbound helped nearly 25% more participants lose more than 15% of their weight compared to Wegovy, Lilly said on Sunday.

Lilly reported in December that its obesity drug had already met the main goal, leading to 47% more weight loss than those who received Wegovy. Full data from the study was reported by the company in a press release and presented at the European Congress on Obesity. The data is the first head-to-head trial