Weekly Market Update - 17 April 2023

Assassination Attempt In Japan

Japanese Prime Minister Fumio Kishida returned to the campaign trail after an explosive device went off at an event in central Japan. A 24-year-old man was arrested on suspicion of throwing the explosive in Kishida’s direction as he was about to give a speech to a crowd in the western prefecture of Wakayama. Kishida was evacuated unharmed, and later resumed his schedule of speeches ahead of a series of by-elections. Kishida’s political fortunes had been improving of late. The event has chilling echoes of the assassination of former Prime Minister Shinzo Abe during a speech before last year’s upper house elections.

Source: Bloomberg

Patents Expiring

Pharma giant Merck will buy Prometheus Biosciences for about $10.8 billion in a bid to bolster its research pipeline and strengthen its portfolio of autoimmune drugs. One of the largest pharma deals in recent history comes as Merck’s blockbuster cancer drug, Keytruda, loses patent protection later this year. Merck has been on the hunt for deals that can protect it from revenue loss when that happens. Patent expirations are driving M&A activity across the pharma sector, with large US drug companies standing to lose more than $200 billion in annual sales through 2030.

Source: Bloomberg

Australian Tax Regime

Australia’s outdated tax system is buckling under spending pressure, prompting the Labor government to explore options to boost revenue to pay for programs including a vast defense build up and health care. At the heart of the problem are large areas of wealth that are all-but exempt from taxation, leading to an over-reliance on income taxes that are already among the highest in the developed world. The problem is, even small tweaks to the tax system can rile interest groups. Australia is forecast to run a budget shortfall equivalent to 2% of gross domestic product in the fiscal year starting July.

Source: Bloomberg