Business
Spillane
istopher
Chr
2008 stock tracker: how robust is pharma?
12 months ago, the Scrip 100 studied the effects of the subprime/credit crisis on IPO and M&A
activity. Here Christopher Spillane analyses its impact on the 15 biopharmaceutical stocks
followed in Scrip’s monthly stock tracker from January 1st to October 31st, 2008
I
t’s been a year of extreme market liquidity on a short-term basis, rattling year in which short-selling was banned
volatility driven by financial woes in the confidence. Eventually the credit markets and some of the best-known players in
US financial system. The subprime crisis dried up and banks sought government investment banking, such as Lehman
that began building towards the end of 2007 intervention to cure their liquidity afflictions Brothers, disappeared.
rolled into a confidence-buckling credit crisis and kick-start interbank lending. Turning to the biopharmaceutical sector
that will be synonymous with 2008. What followed was a taxpayer-funded and the Scrip Stock Tracker, it is clear that
Risk associated with subprime investment bail-out of leading financial institutions to over the year to October 31st, 2008 the
vehicles and securities became clear as low- prevent the financial turmoil boiling over turbulence of the 15 stocks we track has
income homeowners defaulted on mortgage into the real economy and provoking a offered insight into the strength or otherwise
payments rendering the value of these recession – an intervention that now seems of these companies. However, first we must
investments worthless or unknown, and the to have fallen short of its target. So draw attention to the markets and the
crisis then snowballed. With this uncertainty, profound was the subprime/credit crisis that sector indices in order to put share price
financial institutions became unwilling to lend we will depart 2008 much chastened by a performances in context.
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