Marubeni Declines 6%, Nikkei Down 18%

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

Marubeni will close an investment fund that invested in structured investment vehicles. Separately Lehman is likely to sue Marubeni to recover $350 loss. Marubeni fell 6%. Stocks in Japan and Asia closed lower. In Tokyo trading Nikkei 225 dropped 2.3% or 294.93 at 12,525.54 and the broader Topix Index fell 2.5% or 30.85 at 1.212.96.

[R]5:00AM New York, 7:00PM Tokyo - Industrial Production dropped 1.2% in February and Marubeni closed an investment fund after losses in structured finances.[/R]

Stocks in Japan fell after U.S. data showed consumer spending declined in February, while consumer sentiment fell in March. Financial stocks were also affected by news that Marubeni Corp. will dissolve its structured finance unit.

[Market Sentiment

In Tokyo trading Nikkei 225 dropped 2.3% or 294.93 at 12,525.54 and the broader Topix Index fell 2.5% or 30.85 at 1.212.96.

The Nikkei 225 has lost 18.2% in the first three months of the year, the most since 1990.

In the first section of the Tokyo Stock Exchange 6.9 billion shares worth 786 billion yen were traded and in the second section 126 million shares worth 2 billion yen changed hands.

Of the Nikkei 225 stocks 23 gained, 199 declined and 1 was unchanged. Nitto Boseki Co. led gainers with a rise of 5.13% followed by Nisshinbo Industries rising 2.89%.

Industrial Production falls 1.2% in February

The Ministry of Economy, Trade and Industry announced today on its Web site that industrial production dropped for the second straight month by 1.2% in February from the previous month and increased 4.2% from the previous year at 108.2.

Electronic parts and devices, pulp, paper and paper products and transport equipment contributed to the decline, while commodities that contributed to the drop are semiconductor products machinery, active matrix LCD, metal oxide semiconductor IC.

Also according to a Survey on Production Forecast, industrial production is expected to increase 2% in March and ease 1% in April.

The increase in April is expected to be spurred by electronic parts and devices, transport equipment and fabricated materials.

In addition shipments declined for the second consecutive month by 2.6% in February from the previous month, and increased 5.1% from the previous year at 112.7. Industries that mainly contributed to the fall are transport equipment, electronic parts and devices and plastic products correspondingly.

However, inventory in February advanced 0.1% from the previous month and increased 1.2% from the previous year at 97.7 by industries such as transport equipment, electronic parts and devices and general machinery.

U.S. consumer spending, confidence falls

The U.S. Commerce Department said Friday on its Web site that consumer spending rose 0.1% in February, the lowest since September 2006, while the Reuters/University of Michigan consumer sentiment index fell from 78.8 in February to 69.5 in March.

The 0.1% increase was in line with forecasts as personal incomes rose more-than forecasted at 0.5% in February.

Gainers & Losers

Nitto Boseki Co led gainers with a rise of 5.13%, Nisshinbo Industries of 2.89%, in Hokuetsu Paper 2.51%, in Asahi Brewers of 2.49%, and Kirin Holdings of 2.39%.

Pioneer Corp. led decliners with a decline of 7.22%, in Hitachi Ltd of 7.05%, in Marubeni Corp. of 6.56%, in SkyPerfect JSAT 6.20%, and Shinko Securities of 5.84%.

Pioneer Corp rose after Nomura cut its rating to “reduce” in the wake of a rising yen and slowing U.S. growth.

Marubeni Corp. fell after reporting that it has elected to post a lump sum the losses from the fund management operations of Marubeni International Finance Plc as the market value of the losses in the portfolio declined significantly amid the rapid credit crunch. Marubeni Corp has decided to withdraw from fund management operations through investment in structured securities.

The company also fell on reports that Lehman Brothers will file a lawsuit claiming that it was defrauded $355 million which company denies any knowledge of.

Company news

Elpida Memory Inc President Yukio Sakamoto told Bloomberg Television that it will inform computer makers that it plans to increase price 10% in the first half on increasing demand.