Sony, Nippon Steel Up; Ebara Down

123jump.com Staff
15 May, 2008
New York City

Sony estimated operating profit in the current fiscal year to be at 450 billion yen, 20% higher than a year ago. The better than expected forecast lifted sentiment in trading. Nikkei 225 index increased 0.9% or 133.2 to 14,251. Separately, private sector machinery orders received in March fell 8%. Steel prices paid by Japanese automakers may reach 100,000 yen per ton this year. Sony and Nippon Steel led the gaiers in the Nikkei 225 index and Ebara and Shimizu led the decliners in the index.

[R]5:00AM New York, 7:00PM Tokyo - Japan’s private sector machinery orders fall 8% in March. Sony estimates higher operating profit for the current year.[/R]

Market sentiment

In Tokyo trading Nikkei 225 rose 0.94% or 133.19 at 14,251.74 and the broader Topix Index 1.4% or 19.83 at 1,392.87.

In the first section of the Tokyo Stock Exchange 11 billion shares worth 1.3 trillion yen were traded and in the second section 236 million shares valued at 5.7 billion yen changed hands.

Of the Nikkei 225 stocks 163 gained, 54 declined, and 8 were unchanged. Sony Corp. led advancers in the index shares with a rise of 8.6% after reporting yesterday it forecasted operating profit will increase 20% to 450 billion yen in the fiscal year ending March 2009.

Private sector machinery orders fall 8.3% in March

The cabinet office reported today that the total value of machinery orders received by 280 manufacturers operating in Japan fell by 7.8% to 2.4 trillion yen in March from the previous month on a seasonally adjusted basis, but rose 3.6% to 8.2 trillion yen in the January-March period from the previous quarter.

Also total machinery orders are expected to fall 3.4% to 7.9 trillion yen in the quarter to June.

The report noted that private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, declined by 8.3% or 956 billion yen in March on a seasonally adjusted basis and increased by 2.2% worth 3.1 trillion yen in the three months to March. Private sector orders are forecasted to decline by 10.3% to 2.8 trillion yen in the April to June period from the previous quarter.

In addition, manufacturing orders fell 7% or 431 billion yen in March from February and declined 5.9% quarter-on-quarter at 1.4 trillion yen in the quarter to March. Manufacturing orders are expected to 1.5% worth 1.42 trillion yen from the previous quarter in the three months to June.

Non-manufacturing orders, excluding volatile ones, dropped 9.5% worth 526 billion in March and advanced 6.5% on the month or 1.7 trillion yen in the January-March period. Orders are forecasted to fall 18.9% from the quarter-ago period to 1.4 trillion yen in the quarter to June.

According to the statistics office, government orders fell 12.7% from the previous month worth 216 billion yen and declined 2.2% to 698 billion yen in the three months to March. However, government orders are projected to increase by 24.4% from the previous quarter at 868 billion yen in the April to June period.

Overseas orders also fell 16.1% or 973 billion yen in March from February, but rose 3.4% worth 3.47 trillion yen from January to March. Overseas orders are however expected to fall 0.1% to 3.46 trillion yen in the three second quarter ending June.

Statistics also show that orders placed through agencies plummeted by 5.7% or 104 billion yen in March and rose 3.7% at 323 billion yen in the quarter to March. Orders are projected to increase by 1% to 326 billion yen in April-June.

Average steel prices to top 100,000 yen a ton

Asahi.com reported today that average steel prices are likely to rise to 100,000 yen per ton as Toyota Motor Corp. prepared to accept a rise of more than 25,000 yen a ton during negotiations with major steel manufacturers.

The carmaker is reported to have agreed to the increase “in light of the tightening supply-and-demand situation due to the brisk consumption of steel in China and other emerging economies”, and as a move “ to secure supply of steel”.

Gainers & Losers

Sony Corp. led advancers in the Nikkei 225 index shares with a rise of 8.6% followed by increases in Chiyoda Corp. of 7.93%, in Nippon Steel of 7.01%, in Nippon Light Metal of 6.67%, and Daiwa Holdings Co. of 6.56%.

Sony Corp rose after it reported yesterday that it expects operating profit to advance 20% to 450 billion yen in the fiscal year ending March 2009 higher than predicted 425 billion by most analysts.

However, the company recorded an operating loss of 4.7 billion yen as a weak stock market affected securities.

Nippon Steel and other steel makers increased on reports Toyota is prepared to accept an increase in steel prices in order to secure future supplies.

Ebara Corp. led decliners in the Nikkei 225 index shares with a drop of 5.03% followed by losses in Shimizu Corp. of 4.42%, in Shinsei Bank Ltd of 4.04%, in Konami Corp. of 3.86%, and Sky Perfect JSAT of 2.76%.