Nissan, Olympus Weak Earnings; Nikkei Down

123jump.com Staff
04 Aug, 2008
New York City

Stocks in Tokyo fell on global economic worries and weak earnings from Nissan and Olympus. The benchmark index Nikkei 225 fell 1.2% on weak commodities, auto and financial stocks. Nissan reported first quarter revenue fell 4% to 2.3 trillion yen and earnings declined 43% to 53 billion yen, despite a rise in unit sales of 7% to 936,000. Earnings at Olympus fell 63% to 6.5 billion yen on a fall in domestic sales of 13.5% to 84 billion yen.

[R]5:00AM New York, 7:00PM Tokyo - Kuwait to increase investment in Japan to $48 billion from $15 billion. Nissan and Olympus profit falls.[/R]

Stocks in Japan fell after weak earnings from Nissan and Olympus and a weakness in metal prices. Exporters fell as slowdown in the U.S. worries investors.

Market Sentiment

In Tokyo trading Nikkei 225 declined 1.23% or 161.41 to 12,933.18, and the broader Topix Index shed 1.9% or 24.68 to 1,248.25.

In the first section of the Tokyo Stock Exchange 9.5 billion shares valued at 974 billion yen were traded and in the second section 133 million shares worth 2.7 billion yen changed hands.

Of the Nikkei 225 stocks 53 rose, 166 declined, and 6 were unchanged. Astellas Pharmaceuticals Inc. led gainers in the index shares with a rise of 5.32% as investors opted for defensive stocks.

Kuwait to Increase Investment in Japan to $48 billion

The Nikkei News reported on its Web site today that Kuwait’s finance minister Mustafa al-Shimali said yesterday the Kuwait Investment Authority will triple its investments in Japan to $48 billion from its current investment of $15 billion.

Kuwait is interested in Japanese real estate and stocks and is finalizing tax treaty with Japan. Kuwait Investment Authority has a total of $200 billion under management.

Nissan Profits Slumps 42.8% on Stronger Yen

Nissan Motor Co. reported on Friday last week that despite the 7% increase in vehicle sale to 936,000 units in the quarter to June, the company’s net revenues fell 4.1% to 2.3 trillion yen on a stronger yen.

Growth in overseas markets saw sales rising at 23.6% to 302,000 units. However, there are signs that demand is slowing in the U.S., with sales slipping 0.7% to 253,000 units in the three months to June. Sales in Japan fell 2.2% at 148,000 units and were flat in Europe at 156,000 units.

On the overall, net income after tax dropped 42.8% to 52.8 billion yen.

The company expects profit will remain unchanged in the fiscal year ending March 31 with an operating income of 550 billion yen and net income at 340 billion yen.

In the current fiscal year Nissan plans to launch nine “all-new products globally”. Already three products- the Infiniti FX, Maxima and Teana- have been launched in the first quarter.

Olympus Corp Profit Plunges 63%

Olympus Corp reported net income for the first quarter ended June 30 fell 63% to 6.5 billion yen from 17 billion yen a year ago, as domestic sales edged down 13.5% to 84 billion yen from 97 billion yen a year earlier. However, overseas sales gained 1.8% from 167 billion yen in the same period a year ago to 170 billion yen.

Gainers & Losers

Astellas Pharmaceutical Co led advancers in the Nikkei 225 index shares with a rise of 5.32% followed by increases in Fast Retailing of 5.28%, in Kansai Electric Power of 5.15%, in KDDI Corp of 4.62%, in Tokyo Gas Co Ltd of 4.57%.

Astellas Pharmaceutical Inc rose after investors looked for defensive stocks that with no exposure to credit markets.

Dowa Holdings led decliners in the Nikkei 225 index shares with a fall of 9% followed by losses in Nippon Light Metal of 8.81%, in Mazda Motor Corp of 8.76%, in Kawasaki Kisen of 8.68%, and Toho Zinc of 8.57%.

Nippon Light Metals and other commodity stocks slumped as metal prices retreated. Sumitomo Metal Mining shed 8.32 and Sumitomo Metal Industries slid 6.91%.

Steelmakers declined on the concern that a increase in global demand may slow. JFE Holdings plummeted 6.71% and Nippon Steel tumbled 7.06%.

Automakers fell as Nissan reported that net income on the first quarter ended June 30 fell 43%. UBS AG, Merrill Lynch & Co. and Credit Suisse lowered their share price estimates. Isuzu declined 7.03% and Honda lost 4.31%.