Pharma bucks the trend with M&A spree: Global pharma and biotech companies more than doubled their spend on acquisitions in the first five months of the year, according to a report by investment bank Stifel picked up by the Financial Times. Companies shelled out USD 85 bn on acquisitions during the five-month period, up from just USD 35.6 bn in the same period last year and USD 49.1 bn in 2021. Pfizer, Merck, and Sanofi have all announced multi-bn USD acquisitions this year, fueled by the large cash reserves accumulated during the covid-19 pandemic. Pfizer’s USD 43 bn takeover of cancer drugmaker Seagen accounted for more than half of global M&A during the five-month period.

Here’s another: Novartis will acquire Seattle-based biotech firm Chinook Therapeutics for up to USD 35 bn under an agreement announced by the Swiss pharma giant yesterday. The transaction is expected to close in 2H 2023.

Pharma an outlier: Other sectors have seen a sharp drop in M&A activity due to rising borrowing costs and tighter lending. The value of global M&A slumped to a 10-year low in the first quarter of the year.

ALSO WORTH NOTING-

  • China bucks the trend with expansionary monetary policy: China’s central bank cut a key lending rate in a surprise move aimed at boosting the country’s weak economic recovery. (Wall Street Journal)
  • BOE under pressure to hike again on soaring UK wages: The odds of another rate hike by the Bank of England narrowed yesterday after wage growth rose above expectations. (Reuters)
  • Shell shifts focus to oil to keep investors happy: The company plans to maintain or slightly boost oil output until 2030to restore investor confidence amid lackluster returns from renewables and strong earnings from oil and gas, company sources say. (Reuters)
  • Intel could join Arm IPO as anchor investor: The UK-based chip designer Arm is reportedly in talks with Intel and other potential investors about anchoring its planned IPO in New York this year. The Softbank-backed company aims to raise up to USD 10 bn, which would make it one of the largest IPOs this year. (Bloomberg)
  • US junk loans are feeling the impact of higher rates: Aggressive rate hikes by the US Federal Reserve are causing a spike in defaults in the USD 1.4 tn junk loan market. The market saw 18 defaults worth USD 21 bn in the first five months of the year — more than the whole of 2021 and 2022 combined. (Financial Times)

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THE CLOSING BELL-

The EGX30 rose 0.9% at yesterday’s close on turnover of EGP 3.84 bn. Foreign investors were net sellers. The index is up 22.4% YTD.

In the green: Mopco (+20.0%), GB Corp (+6.4%) and Telecom Egypt (+4.7%).

In the red: TMG Holding (-2.1%), Egypt Kuwait Holding (-2.0%) and Madinet Masr (-1.9%).

Asian markets are mostly up in early trading this morning and futures show a sea of green for European and US indices later in the day, as equities continue to ride optimism that the US Federal Reserve will today keep interest rates steady after more than a year of monetary tightening.

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