Hitachi Plans $3 Billion Subsidiaries Purchase

Mayank Mehta
28 Jul, 2009
New York City

Hitachi Ltd plans to spend nearly $3 billion to acquire five subsidiaries in information and technology areas. Sapporo Holdings lowered its estimate of first half loss. JFE increased after it issued optimistic outlook by reported a loss in the first quarter.

[R]8:00 PM Tokyo, 6:00 AM New York – Hitachi Ltd plans to spend nearly $3 billion to acquire five subsidiaries in information and technology areas. Sapporo Holdings lowered its estimate of first half loss. JFE increased after it issued optimistic outlook by reported a loss in the first quarter.[/R]

Tokyo stocks edged lower after rising for nine days in a row. The benchmark index in 9-day rally surged 11% on the earnings expectations and global economic recovery.

The Nikkei 225 Index in Tokyo closed lower 1.40 or 0.01% to 10,087.26 and yen increased 0.34 to close at 94.66 to a dollar.

Gainers & Losers

Hitachi Ltd dropped 3.6% to 293 yen after it reported fiscal first quarter revenue decline of 24% to 1.9 trillion yen ($19.7 billion) and net loss of 90.7 billion yen compared to net income of 54.3 billion yen a year ago quartet.

The company also announced plans to acquire five subsidiaries for 282.2 billion in the areas of information, telecom and technology infrastructure businesses.

Sapporo Holdings Ltd increased 5.5% to 600 yen after it lowered the estimate of loss in the first half to 700 million yen from 3,700 million yen and net sales of 182.4 billion yen compared to 188.8 billion yen. The previous forecast was issued on Feb 13.

Sumitomo Mitsui increased 3.9% to 3,990 yen after Nomura lifted its rating on the stocks and made positive comments.

Canon decreased 0.3% to 3,370 yen after second quarter sales decreased 28% to 793 billion yen and net income plunged 85% to 15 billion yen. The sales in the first half declined 30% and net income fell 85%. Decline in sales and product prices hurt the results in the period. Office products sales in Japan declined 16% in the second quarter and 21% in the first half. Sales of digital camera declined 21% in the quarter on price reduction and stronger yen.

The company announced the quarterly dividend of 55 yen similar to the quarter a year ago.

JFE increased 7.3% to 3,550 yen after it reported fiscal first quarter revenues decline of 37% to 588 billion yen and ordinary loss of 67.2 billion yen and let loss of 41.5 billion yen. The weak market for steel products and shipping rates hurt the results. The company offered better than expected outlook for the current fiscal year.

Citizen Holdings increased 4.5% to 509 yen.

Nikkei 200 Average Movers

Taiyo Yuden Co., Ltd led the decliners in the Nikkei 225 index of 5.2% followed by losses in Sanyo Electric Co Ltd of 5.0%, in Clarion Co Ltd of 5.0%, in OKUMA Corp of 4.0% and in Hitachi Ltd of 3.6%.

JFE Holdings Inc led gainers in the Nikkei 225 index with a rise of 7.2% followed by gains in Sumitomo Realty & Development Co Ltd of 5.8%, in Sapporo Holdings Ltd of 5.4% and Shinsei Bank Ltd of 4.6%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 1.40 or 0.01% to 10,087.26, Hang Seng index in Hong Kong increased 372.92 or 1.84% to 20,624.54 and CSI 300 index in China higher 12.19 or 0.33% to 3,755.82. ASX 200 index in Australia increased 29.90 or 0.72% to 4,169.50. The FTSE Bursa KL Composite index in Malaysia closed higher 15.95 or 1.38% to 1,172.38.

The Kospi Index in South Korea increased 1.98 or 0.13% to close at 1,526.03. SET index in Thailand closed higher 4.13 or 0.67% to 621.96 and JSE Index in Indonesia increased 28.00 or 1.27% to 2,237.10. The Sensex index in India decreased 43.10 or 0.28% to 15,331.94.