Nikkei Rises 2% in Asia Rally

123jump.com Staff
25 Mar, 2008
New York City

Tokyo stocks rallied on the back of higher closing in the U.S. in Monday trading. Banks and brokerage stocks led the advancing issues. In Tokyo trading, Nikkei 225 rose 2.12% or 265.13 at 12,745.22, and the broader Topix Index increased 1.5% or 18.83 to 1,242.98. Nippon Glass forecasted 20% rise in sales and 50% surge in operating profit on higher demand in the next fiscal year.

[R]5:00AM New York, 7:00PM Tokyo - JP Morgan revised offer for Bear Stearns lift Tokyo[/R]

Japan stock averages traded in positive territory on news that U.S. investment bank JP Morgan Chase & Co has quadrupled its offer for Bear Stearns and after homes sales unexpectedly increased.

In Tokyo trading, Nikkei 225 rose 2.12% or 265.13 at 12,745.22, and the broader Topix Index increased 1.5% or 18.83 to 1,242.98.

In the first section of the Tokyo Stock Exchange 8.2 billion shares valued at 925 billion yen were traded and in the second section 298 million shares valued at 4.6 billion yen changed hands.

Of the Nikkei 225 stocks, 168 advanced, 45 fell and 12 were unchanged. Taiheiyo Cement led gainers in the Nikkei 225 index shares with an increase of 6.61%.

JP Morgan Chase raises its bid for Bear Stearns

JP Morgan Chase & Co. announced on its Web site yesterday that the bank under the amended merger agreement will pay $10 per share for Bear Stearns and immediately acquire 39.5% of Bear Stearns. The deal was voted in favor unanimously by the board of directors at Bear.

Under the revised terms, each share of Bear Stearns common stock would be exchanged for 0.21753 shares of JPMorgan Chase common stock, an increase from 0.05473 shares, reflecting an implied value of approximately $10 per share of Bear Stearns common stock based on the closing price of JPMorgan Chase common stock on the New York Stock Exchange on March 20, 2008.

In addition, JPMorgan Chase and Bear Stearns entered into a share purchase agreement under which JPMorgan Chase will purchase 95 million newly issued shares, or 39.5% of the outstanding Bear Stearns common stock after giving effect to the issuance, at the same price as provided in the amended merger agreement.

The purchase of 95 million shares is expected to be completed on or about April 8, 2008.

Also the agreement with the Federal Reserve Bank of New York to provide $30 billion in special financing with the transaction has also been amended. JPMorgan Chase will bear the first $1 billion of any losses associated from the sale of Bear Stearns assets and the Fed will fund the remaining $29 billion on a non-recourse basis to JPMorgan Chase.

U.S. home sales unexpectedly increase

The National Association of Realtors, an industry group of realtors in the U.S, reported yesterday that sales of existing home sales- including single-family, townhomes, condominiums and co-ops increased 2.9% to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January.

However, the sales declined 23.8% from 6.60 million unit in February 2007. The sales pace has been in a fairly narrow range since last September.

The national median existing-home price for all housing types fell 8.2% from a year earlier to $195,900 in February, a sharpest decline in more than three decades.

Real land prices fall

The Nikkei news online reported today that land prices in the Tokyo metropolitan have started falling on the weakness in credit markets and a cooling condominium market in the city.

Gainers & Losers
Taiheiyo Cement led gainers in the Nikkei 225 index shares with a rise of 6.61% followed by increases in Softbank Corp. of 6.45%, in Pioneer Corp. of 6.07%, in Asahi Glass Co. of 6.04%, and Mitsui O.S.K. Lines of 5.98%.

Other commodity and trading companies rose as well on the expectation of a rise in demand. Sumitomo Metal Mining gained 5.59% and Sumitomo Corp. increased 4.46%.

Shipping lines also gained as well led by a rise of 4.8% in Kawasaki Kisen.

Mitsui Sumitomo led decliners in the Nikkei 225 index shares with a drop of 5.27% followed by losses in Nippon Paper Group of 5.22%, in Mitsukoshi Limited of 3.23%, in Nippon Telegraph of 2.92%, and Nippon Suisan of 2.85%.

Company News

Nippon Glass Co. announced yesterday that sales may rise as much as 20% and operating profit to surge 50% in the next fiscal year starting April 1 as a result of robust demand for substrate glass used in LCDs.