Pharmabiz
 

Budget proposals bring down BSE Healthcare index by 68.58 points

Our Bureau, MumbaiMonday, July 6, 2009, 08:00 Hrs  [IST]

The stock market indices reacted sharply today and moved down by over 950 points after the announcement of Union Budget 2009-10 by finance minister Pranab Mukherjee in the Lok Sabha. Though the major sectors like banking, metal, consumer goods, oil & gas, power, public sector undertaking and realty segments received major setback, the healthcare segment received relatively mild shock. The budget proposal failed to encourage the trading community. However, few analysts expressed view that the finance minister has chalked out the long term economic roadmap while putting his proposals and these will help in the long run. The BSE Sensex of major 30 scrip dipped by over 950 points, cutting the 14,000 mark, to 13,959 in the afternoon session. The BSE Sensex closed at 14,043 points as against pre-budget close of 14,913. The BSE Healchcare index of 22 pharmaceutical companies, however, declined by 68.58 points to close at 3,586.33 points. Other important sectors of economy such as metal, banking and consumer goods received major blow and these indices drifted down by over 500 points. The share price of leading oil and gas companies also declined sharply. The pharmaceutical sector was looking for more incentives on research expenditure and tax benefits. The analyst from broking firm said that several blockbuster drugs are going off patent and the international giants have failed to bring new drugs in the market during last few years. The Indian pharma companies have set up excellent infrastructure for the research activities and the Finance Ministry should have offered greater help to the research based companies. The budget 2009-10 has reduced the basic customs duty to 5 per cent from 10 per cent on influenza vaccine and nine specified life saving drugs used for the treatment of breast cancer, hepatitis-B, rheumatic arthritis, etc, on the bulk drugs used for the manufacture of such drugs. They will also be totally exempt from excise duty and countervailing duty. The customs duty will also be reduced from 7.5 per cent to 5 per cent on two specified life-saving devises used in treatment of heart conditions. These devises will be fully exempt from excise duty and CVD also. The analyst said the general budget has not given any tax benefits to the healthcare industry which is offering high employment to scientists and researchers, except fringe benefit tax. The clinical trial and discovery drug activities are gaining momentum in India and several international players are looking partnership with Indian players. The Budget totally overlooked this aspect and the pharmaceutical companies have to carry the same burden in the current year also. Leading pharma shares like Aurobindo Pharma declined by Rs 36.70 to Rs 463.50 and Sun Pharmaceutical moved down by Rs 20.50 to Rs 1,130 as at the close of post budget session. Similarly, Dr Reddy's Laboratories, Divi's Lab, Lupin and Pfizer shares also failed by over Rs 20. Ranbaxy scrip, however, moved up by Rs 10.15 to Rs 260.70.

 
[Close]