Nikkei Surges 4%

123jump.com Staff
02 Apr, 2008
New York City

Japanese stocks surged after tracking gains in the U.S. and Europe. More than 70% of trading on Tokyo Stock Exchange originates with foreign investors. Nikkei 225 rose 4.21% or 532.95 to 13,189.36, and the broader Topix Index gained 1.5% or 17.5 at 1,230.49. Of the Nikkei 225 index shares 214 gained, 8 declined and 3 were unchanged. Shinko Securities led advancers in the Nikkei 225 index shares with a surge of 14%.

[R]5:00AM New York, 7:00PM Tokyo – Investors enthusiasm in the U.S. helped market averages in Japan and Asia.[/R]

Stocks in Japan surged after a steep rise in the U.S. indexes and an increase in European stock markets. U.S. markets rose after Lehman Brothers said that broker will increase its offering to raise $4 billion. Investors have been concerned, after the demise of Bear Stearns that Lehman may not have adequate liquidity. Markets in Europe rose after UBS announced a plan to complete rights offering of $15 billion and pre-announced $12 billion loss in the first quarter.

Market Sentiment

In Tokyo trading Nikkei 225 rose 4.21% or 532.95 to 13,189.36, and the broader Topix Index gained 1.5% or 17.5 at 1,230.49.

In the first section of the Tokyo Stock Exchange 9.1 billion shares worth 1 trillion yen was traded and in the second section 144 million shares valued at 2.9 billion yen changed hands.

Of the Nikkei 225 index shares 214 gained, 8 declined and 3 were unchanged. Shinko Securities led advancers in the Nikkei 225 index shares with a surge of 13.54% after Lehman Brothers announced yesterday that it had priced a $4 billion offering of 4 million shares of 7.25% convertible preferred stock with a par value of $1 per share and a liquidation preference of $1,000 per share.

Lehman Brothers increases preferred stock sale by 33%

U.S. brokerage Lehman Brothers reported on its Web site yesterday that it has priced a $4 billion offering of 4 million shares of 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, with a par value of $1.00 per share and a liquidation preference of $1,000 per share.

The company notes that each share of the preferred stock will be convertible at any time, at the option of the holder, into 20.0509 shares of Lehman Brothers Holdings Inc.’s common stock, reflecting an initial conversion price of approximately $49.87 per common share.

According to the brokerage, the offering was increased after “substantial interest from several key long-term clients and institutional investors”.

The brokerage will also pay dividends on the preferred stock quarterly in arrears on January 1, April 1, July 1, and October 1 of each year, beginning July 1, 2008, at a rate of 7.25% per annum, if and when declared by its board of directors.

UBS to raise 15 billion euros in rights offer

Swiss bank UBS AG, which recently reported first quarter net losses of approximately 12 million euros, announced on Monday on its Web site that the company plans to raise 15 billion euros that is fully underwritten by four leading international banks in order to increase its Tier 1 capital.

Gainers & Losers

Shinko Securities led advancers in the Nikkei 225 index shares with a rise of 13.54% followed by rises in Sumitomo Realty of 12.39%, in Mitsui Fudosan 12.19%, in Sanyo Electric of 11.43%, and Shinsei Bank Ltd of 10.81%.

Shinko Securities gained after it increased the size of its preferred stock sale by 33%.

Financial and realty stocks also gained on easing worries of credit market losses. Mitsubishi UFJ Financial Group advanced 9.82% and Mizuho Financial Group rose 10.08%.

Mitsubishi Estate Co. edged up 9.74% and Tokyu Land Corp increased 9.97%.

Exporters rose as well after the yen declined to 101.90 from 99.69 at the close of trade yesterday. Canon increased 5.96%, Sony Corp. rose 5.91% and Toyota Motor Corp. gained 4.38%.

Chiyoda Corp led decliners in the Nikkei 225 index shares with a drop of 10.06% followed by losses in Isetan Mitsukoshi Holdings of 3.07%, in Marubeni Corp of 1.96%, in Sumitomo Metal Mining of 1.33% and East Japan Railway of 1.28%.

Nippon Telegraph and Telephone sales 35.2% stake in Sri Lanka Telecom

AFP news reported that Nippon Telegraph and Telephone (NTT) said yesterday it had sold its 35.2% stake in state-owned Sri Lanka Telecom for $297 million.

The purchase by Malaysia''s Global Telecommunications Holdings (GTH) NV ended the largest single investment in Sri Lanka by a Japanese firm.

Sri Lanka Telecom (SLT) shares closed 16.4 % higher at 48.00 rupees on Tuesday after Global said it would be willing to buy out the remaining shareholders at 50.50 rupees.