Drug firms’ bitter medicine sickens index
Print Edition
SHANGHAI stocks fell the most in two weeks yesterday as drug makers swallowed a bitter medicine from a nationwide bribery investigation.
The Shanghai Composite Index shed 0.87 percent, the biggest daily loss since July 29, to 2,081.88 points.
The State Administration for Industry and Commerce, a regulator in charge of market supervision, yesterday launched a three-month probe targeting bribery, fraud and other unfair behavior in the pharmaceutical and other industries.
The nationwide probe came after the corruption scandal involving multinational pharmaceutical giant GlaxoSmith Kline which has been accused of paying millions of dollars in bribes to doctors and others.
“The investigation may affect some pharmaceutical firms’ marketing activities and impact their earnings in the second half of the year,” said Niu Chunbao, an independent analyst.
But Shi Ming, analyst with Shenyin and Wanguo Securities, said the impact on the pharmaceutical sector is seen as short-term because an aging population, rising urbanization and chronic diseases will support demand for drugs.
Tianjin Zhongxin Pharmaceutical Group fell 7.2 percent to 13.30 yuan (US$2.18). Jiangsu Kanion Pharmaceutical Co shed 6.3 percent to 27.58 yuan. Jiangsu Hengrui Medicine Co lost 5.9 percent to 32.76 yuan.
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