Mizuho Loan Losses Spread Fear

123jump.com Staff
01 Feb, 2008
New York City

In Friday trading, Japanese shares declined as investors continued to worry about the loan losses news from Japanese banks. Japan''s second-biggest bank Mizuho fell 5% after reporting a subprime loss of 275 billion yen and cutting its outlook for 2008 by 26%. Concerns over the U.S. jobs data and an 8% decline in Sony shares to a 14-month low also hurt trading sentiment.

[R]5:00AM New York, 7:00PM Tokyo - Mizuho cuts full-year profit forecast by 26% to 480 billion yen[/R]

Stock indexes in Japan declined on rising losses from subprime investments and weak corporate profits. Investors were driven to stocks insulated from the U.S. slowdown.

In Tokyo trading, Nikkei 225 plunged 0.7% or 95.31 to 13,497.16, and the broader Topix Index dropped 9.45 to 1,336.86.

In the first section of the Tokyo Stock Exchange 10 billion stocks worth 1.2 trillion yen were traded and in the second section 796 million shares valued at 7.1 billion yen changed hands.

Of the Nikkei 225 Index stocks 77 rose, 144 declined, and 4 were unchanged. Toho Zinc led the advancers with a rise of 13.59%, followed by Pioneer Corp. rising 12.94% after reporting 37% profit increase for the three months ending in December.

Commodity prices rose on falling output of coal and zinc after China cut production due to the heavy and worst snowfall since 1954. Zinc prices soared to a nine-month high at 7%, nickel gained 0.6% and copper rose 2.7%.

Nippon Mining Holdings increased 2.88% and Mitsui Mining & Smelting edged up 1.50%, as a result.

Mizuho Financial Group reported yesterday that subprime losses topped 275 billion yen and dragged full year profit forecast down 26% to 480 billion yen in the year ending March 2008.

The yen edged lower 0.25% from 106.36 to 106.38.

Toshiba Corporation and Komatsu rose 0.84% and 0.59% respectively, as a result.

Of the Nikkei 225 index stocks Toho Zinc led the gainers with a rise of 13.59%, followed by increases in Pioneer Corporation of 12.94%, in TDK Corporation of 9.59%, in NGK Insulators of 6.39%, and in Japan Steel Works of 5.92%.

Pioneer Corporation rose after it reported yesterday that operating profit in the three months to December jumped from 5 billion yen in the same period a year ago to 6.9 billion yen.

Chugai Pharmaceutical Company led the declining Nikkei 225 Index stocks with a drop of 14.24%, followed by losses in Konica Minolta Holdings of 11.03%, in Sony Corporation of 8.24%, in Heiwa Real Estate of 6.25%, and in Toyota Tsusho of 5.22%.

Chugai Pharmaceutical added to yesterday’s losses after reporting yesterday that profits will tumble 58% this year on low drug prices and a cut in pharmaceutical prices, that was ordered by the government.

Sony Corporation declined 8.2% after it cut its full year profit forecast. The company, however, reported that third quarter sales rose 9.6% from 2.6 trillion to 2.8 trillion and net income climbed 25.2% from 150 billion yen to 200 billion yen.

Matsushita Electric Industrial Company reported yesterday that third quarter profit climbed 46% to 115.2 billion yen from 78.7 billion yen a year earlier driven by sales of audio visual products and appliances.

Sales in the quarter fell from 4% from 2.44 trillion yen a year ago to 2.34 trillion yen. The stock closed up 4.89%.

All Nippon Airways reported yesterday that profit in the third quarter gained 33.9% to 12.5 billion yen from 9.3% a year ago after strong growth in international service and the disposal of hotel assets.

Sales for the quarter under review slid 0.9% from the year-ago quarter to 378 billion yen from 381.6 billion yen.

The company added that it will spend 600 billion yen to buy a new fleet of 60 Boeing aircraft in order to cut costs as part of its midterm plan to March 2012. Part of the fleet will also be the B787. The company rose 4.49% on the news.

Suzuki reported that third quarter profit increased 20% to 216 billion yen.