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[update] Drug Stocks Push Nikkei Higher
Business Brokerage by Randy Chen
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Forex Broker The Nikkei traded up 8.44 points to 11,668.73 by mid-day Monday, led by drug stocks Sankyo and Daiichi Pharmaceutical that are rumored to merge.If you would like to receive late breaking business news covered by AXcess News then you need to subscribe. By joining, you can stay ahead of the pack and receive the latest news in your email in-box first.
On Sunday night the Nikkei respond very slowly to the recovery in the Dow, but after all, the Japanese stock market ended much lower than its intraday high.
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Real Estate Broker Feb 21, 2005 (AXcess News) Tokyo - The Nikkei traded up 8.44 points to 11,668.73 by mid-day Monday, led by drug stocks Sankyo and Daiichi Pharmaceutical that are rumored to merge.
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Agency Brokerage Spark A Japanese business newspaper, Nihon Keizai, released a story saying the two pharmaceutical stocks were merging. That touched off both stocks trading higher with Sankyo rising 6.8 percent and Daiichi shares up 4.7 percent. The business daily said that the merger is planned for October. The combination would create a drug company with over 900 billion yen ($8.51 billion) in annual sales, the newspaper said.
"I think this allays a lot of fears ... and the stock should trade higher. It' - less than 10 times earnings." The company also noted that it made progress toward a resolution with the U.S. Drug Enforcement Administration related to the distribution of controlled drugs. The company's license to distribute controlled substances from certain of its centers had been suspended.
Business Broker Traders in Japan were bullish on the news as they perceived a combination would be in the best interest of the market considering the number of drug stocks listed. If the two companies merge it would create the second largest pharmaceutical company listed on the Nikkei.Sankyo is already the second largest drug company in Japan and Daiichi ranks sixth.
Brokerage Account In other action on the Nikkei, Mitsubishi Tokyo Financial Group offered $29 billion to buy Japan's fourth-largest bank, UFJ Holdings Inc.UFJ shares climbed 1.2 percent to 586,000 yen.Mitsubishi Tokyo offered 0.62 shares for every one share of UFJ, which was a premium to Friday's close of 3.1 percent.
Stock Broker Mitsubishi Tokyo's shares rose 0.3 percent to 966,000 yen.Advertisement
Brokerage Online Stock Trading In August, Sumitomo Mitsui Financial Group made an unsolicited bid for UFJ that went unanswered. Based on their offering price, Mitsubishi Tokyo's is a 23.5 percent premium, or $35 billion more.
Broker Justin Ticket Sumitomo's stock rose 0.3 percent to 717,000 yen.Monday, the U.S. stock exchanges are closed for President's Day, a national holiday. The lack of a counter market kept many large block buyers out of the Nikkei Monday.
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