Nikkei Soars 2.1% and Extends Two-day Rally, Itochu to Take Citic Stake

Hiruki Nakamura
20 Jan, 2015
New York City

Nikkei index in Tokyo soared 2.1% and extended gains for the second day in a row and the yen weakened. Itochu and Thailand based Charoen Pokphand Group filed to acquire 10% stake in China controlled Citic.

[R]4:30 PM Tokyo – Nikkei index in Tokyo soared 2.1% and extended gains for the second day in a row and the yen weakened. Itochu and Thailand based Charoen Pokphand Group filed to acquire 10% stake in China controlled Citic.[/R]

Stocks in Japan advanced for the second day in a row and the yen eased ahead of the Bank of Japan policymakers’ two-day meeting that began today.

In addition, investors also reviewed the latest cut in global economic growth outlook to 3.5% from the previous estimate in October of 3.7% released by the International Monetary Fund.

The IMF also estimated Japan’s economy to expand at 1.4% in 2014 and slowdown to 1% in 2015 and inflation to fall from 2.8% to 1.7% in the two corresponding years.

The Nikkei 225 Stock Average climbed 352.01 or 2.1% to 17,366.30 and the broader Topix index jumped 25.22 or 1.8% to 1,397.63.

The yen slipped to close at 118.41 against one dollar.

Stocks in Review

Itochu Corp dropped 2.5% to 1,207 yen after the trading company and Thailand-based Charoen Pokphand Group filed with the Hong Kong Stock Exchange their plan to acquire 10% stake in China-based state-owned conglomerate Citic Group Corp. with an estimated investment of about 1 trillion yen or $8.5 billion.

The first stage of transaction is expected to close in April and second stage of acquisition is expected to be completed in October 2015.

The two companied also said in the filing that they plan to purchase HK$45.9 billion of convertible preferred stock and increase stake to 20.6%.

Hitachi, Ltd increased 1.6% to 893.60 yen and the diversified company and Tokyo Electric Power Co. agreed to provide cloud-based business support services “ePower Cloud” engaged in power supplies.

Japan Exchange Group Inc climbed 3.4% to 2,775 yen and the trading exchange operator revised full-year net sales to jump 8.6% to 101 billion yen and net income to climb 26% to 26.5 billion yen.

NEXT Co., Ltd jumped 2.4% to 1,035 yen after the real estate developer said sales in December soared 13.8% to 13.20 billion yen and revenues form real estate information services segment surged 14% to 1.31 billion yen a year ago month.