Bargain Hunters Return to Tokyo, Hon Hai Pursues Sharp

Hiruki Nakamura
28 Dec, 2015
New York City

The Nikkei 225 average closed higher as bargain-hunting offset disappointing November production and retail data. Taiwan-based Hon Hai Precision Industry is exploring to acquire Sharp Corp. Tri-Stage expects annual net income to plunge 23.1%.

[R]4:30 PM Tokyo – The Nikkei 225 average closed higher as bargain-hunting offset disappointing November production and retail data. Taiwan-based Hon Hai Precision Industry is exploring to acquire Sharp Corp. Tri-Stage expects annual net income to plunge 23.1%.[/R]

Stocks in Tokyo closed higher on Monday after five days of decline and bargain hunters returned.

Trading volume was thin as many world brokerages and stock exchanges remained closed after the Christmas holidays and in observance of Boxing Day.

Japanese industrial production in November slumped 1%, the first decline in three months and following a 1.4% increase in October, the Ministry of Economy, Trade and Industry said.

November retail sales fell 1.0% from a year ago and declined 2.5% compared to the previous month, indicating the first decline in four months.

On the positive side, the housing starts in November increased 1.7%, compared to 2.5% decline in October, the Ministry of Land, Infrastructure, Transport and Tourism reported.

Automobile production in November jumped 6% from the same month a year ago to 743,401 units, the Japan Automobile Manufacturers Association said.

Domestic automobile demand fell 6.6% to 388,817 units, while exports surged 12.7% to 414,870 units in November.

In November, motorcycle production plunged 11.9% to 46,453 units and export tumbled 23% to 33,080 units.

Separately, the Bank of Japan forecasted the 2020 Olympic Games to boost the economy with 30 trillion yen by 2020.

Gross domestic product is estimated to increase between 0.2% and 0.3% per year between 2014 and 2020 driven by construction, game preparation, and tourism activities.

The Nikkei 225 Stock Average jumped 104.29 or 0.6% to 18,873.35 and the broader Topix index increased 13 to 1,529.22.

The yen gained against the U.S. dollar to 120.47.

Stocks in Review

Japan Process Development Co Ltd increased 0.7% to 1,178 yen after the information technology company said net sales in the first-half ending in November rose 1.5% from a year ago to 2.78 billion yen.

Net income in the period jumped 9.6% to 175 million yen and earnings per share increased to 35.55 yen from 30.88 yen in the same period a year ago.

The company estimated net sales for the year ending in May 2016 to decline 6.3% to 5.45 billion yen and net income to drop 4.9% to 295 million yen.

Sharp Corporation surged 7.3% to 118 yen on local reports that Taiwan-based electronics products contract supplier Hon Hai Precision Industry approached Sharp to acquire the struggling electronic equipment maker for 300 billion yen or $2.5 billion.

Tri-Stage Inc fell 0.5% to 2,291 yen after the advertising and marketing company stated net sales in the third-quarter ending in November soared 14.8% from a year ago to 27.81 billion yen.

Net income in the period surged 23.9% to 424 million yen and diluted earnings per share jumped to 58.40 yen from 45.84 yen in the same period a year ago.

Tri-Stage forecasted net sales in the year ending in February to increase 8.2% to 34.82 billion yen but net income is expected to plunge 23.1% to 410 million yen.

Zojirushi Corporation plunged 8.2% to 1,584 yen after the household appliances maker forecasted net income for the first half of the year to decline 25.5% to 3.40 billion yen and net sales to jump 3.8% to 51 billion yen in the same period.

Net sales for fiscal 2016 are expected to increase 2.5% to 92 billion yen, while net income will decline 16.1% to 5.30 billion yen.

The home appliances maker reported net sales in the year ending in November surged 16.9% from a year ago to 89.80 billion yen.

Net income in the period soared 67.9% to 6.31 billion yen and earnings per share rose to 93.44 yen from 55.65 yen in the same period a year ago.