Nikkei Extends Weekly Loss; Fujitsu, Toshiba and Vaio in Merger Talks

Hiruki Nakamura
04 Dec, 2015
New York City

Stocks in Tokyo extended losses and the Nikkei dropped 1.9% in the week. Fujitsu, Toshiba and Vaio are in merger talks and combine personal computer business with the domestic market share of 30%.

[R]4:30 PM Tokyo – Stocks in Tokyo extended losses and the Nikkei dropped 1.9% in the week. Fujitsu, Toshiba and Vaio are in merger talks and combine personal computer business with the domestic market share of 30%.[/R]

The Nikkei 225 average dropped to a three-week low and registered the largest one-day decline since November 2.

Stocks in Tokyo and in Asia declined and continued to drift lower for the second day after the European Central Bank failed to meet elevated market expectations of deeper stimulus steps.

Investors also remained cautious ahead of the release of the U.S. jobs data, due later today, and the decisions of the OPEC meeting in Vienna, that may lead to a change in crude oil production.

On Thursday, the ECB lowered rates deeper into negative territory and extended the duration of its stimulus program but failed to widen the program.

In London trading, The FTSE 100 lost 2.3%. In Frankfurt, DAX dropped 3.5% and in Paris, CAC 40 fell 3.6%.

The seasonally adjusted consumer confidence index in November jumped to 42.6 from 41.5 in the previous month, the Cabinet Office said.

The Nikkei business daily reported that Fujitsu, Toshiba Corp and Vaio Corp discuss a three-way merger of their personal computer operations.

Sega Sammy and Showa Denko declined after lowering their annual forecasts.

The Nikkei 225 Stock Average declined 435.42 or 2.2% to 19,504.48 and the broader Topix index slumped 28.92 to 1,574.02.

For the week, Nikkei 225 dropped 1.9%.

The yen weakened to 122.62 against a dollar.

Stocks in Review

Toshiba Corp., Fujitsu Ltd. and Vaio Corp. reportedly are in merger talks for their personal computer businesses.

A merger among three personal computer makers would create a market leader with more than 30% of the domestic computer market.

The potential deal would also help the companies to restructure their businesses and reduce operational costs.

Toshiba fell 1.1% to 302 yen, while Fujitsu stock jumped 2.3% to 647 yen.

None of the companies confirmed the talks.

Sega Sammy Holdings Inc. slumped 2.5% to 1,286 yen after the pachinko machines maker lowered net sales forecast for the year ending in March 2016.

Revenues are expected to decline 15.5% to 355 billion yen from the earlier estimate of about 420 billion yen.

Net profit for the year is forecast to plunge 89.5% to 2 billion, compared with previous guidance of 19 billion yen.

Showa Denko K.K decreased 1.3% to 155 yen after the petrochemical company lowered estimated net sales for the year.

Annual net sales are expected to drop 4.8% to 785 billion yen from an earlier forecast of 825 billion yen.

Net profit for the year will decline 30% to 7 billion yen, compared with previous guidance of 10 billion yen.