CIMB says Malaysian pharmas have scope to adjust to TPP changes

CIMB Equities Research said last week the Trans-Pacific Partnership (TPP) could negatively impact the Malaysian pharmaceutical sector, but those effects won't be felt any time soon, according to a report in The Nation.

CIMP said most Malaysian producers focus on the domestic market and those that do focus on exports are looking at markets not included in the TPP.

"Those with the ambition to expand beyond Malaysia, such as Hovid and Pharmaniaga, are eyeing emerging markets like Nigeria, the Philippines and Indonesia, which are not involved in the TPP," CIMB said in its report, according to the newspaper.

"We believe the TPP will subject government procurement and state-owned enterprises to greater competition, as the Ministry of International Trade and Industry was not able to totally carve out these areas from the TPP," CIMB Research said.

CIMB maintained its current forecasts for Malaysian drug companies because of the time it will take for TPP to actually be implemented as the 12-nation pact could take several years to be fully approved by the legislatures and parliaments that will need to approve the deal, The Nation reported.

The report also said "TPP still possesses a risk to the sector's valuation as it could alter the sector's long-term prospects" and CIMB may review its numbers when more details become available.

- here's the story from The Nation