Kubota Rises, Tokyo Stocks Fall

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

Stocks in Japan fell as worries related to banking sector earnings rose. Losses at financial institutions in Japan increased above 1 trillion yen and are likely to climb higher. Chuo Mitsui Trust Holding first quarter profit fell 52%. Machinery order in June rose. Kubota first quarter revenue fell 2.5% and earnings declined 16.5%. JAL net loss in the quarter shrank to 3.4 billion yen.

[R]5:00AM New York, 7:00PM Tokyo - Japan machinery orders increase 4.8% to 2.6 trillion yen in June. Financial institution in Japan losses rise to a record high. JAL report a loss. Kubota earnings fall 16%.[/R]

Stocks in Japan fell marginally led by financial stocks after Chuo Mitsui Trust Holdings reported that first quarter profits declined of 52%. Financial stocks woes were also compounded after American Insurance Group (AIG) reported yesterday that it wrote down the value of assets including credit-default swaps by $11.64 billion.

Market Sentiment

In Tokyo trading Nikkei 225 fell 0.98% or 129.9 to 13,124.99, and the broader Topix Index declined 1.6% or 18.46 to 1,258.81.

In the first section of the Tokyo Stock Exchange 9.3 billion shares valued at 989 billion yen were traded and in the section 129 million shares worth 1.9 billion yen changed hands.

Of the Nikkei 225 stocks 53 rose, 167 declined and 5 were unchanged. Kubota Corp led advancers in the index shares with a rise of 15.18% followed by Taiyo Yuden increasing 10.43%.

Machine Orders Fall 4.8% in June

Japan’s Cabinet Office reported today on its Web site that the total value of machinery orders received by 280 manufacturers operating in Japan fell by 4.8% or 2.6 trillion yen in June from a gain of 10.8% or 2.8 trillion yen the previous month.

In the three months to June, total machinery orders declined by 1.4% to 8 trillion yen and in forecasted to slump 2.9% to 7.8 trillion yen in the quarter to September.

Private sector machinery orders, excluding volatile ones, declined 2.6% at 1 trillion yen in June from a rise of 10.4% or 1.1 trillion yen in May. Orders in the quarter to June however gained by 0.6% or 3.2 trillion yen, but are forecasted to plunge 3% to 3.1 trillion yen in the three months ended September.

Manufacturing orders advanced 3.9% to 512 billion yen in the period from an increase of 12.2% to 493 billion yen the previous month. Similarly, manufacturing orders in the quarter to June edged up 2.7% to 1.4 trillion yen and is projected to fall 4% to 1.3 trillion yen.

Non manufacturing orders dipped 3.3% or 603 billion yen in June from an increase of 8.8% to 623 billion yen a month earlier. Orders in the quarter to June advanced 1% or 1.79 trillion yen but are expected to plunge 3% to 1.74 trillion in the three months through September.

According to the Cabinet Office, government orders gained 4.4% to 241 billion yen in the review period from a decline of 13.9% or 230 billion yen the previous month. Also government orders soared 5.9% or 739 billion yen in the second quarter ended June and is forecasted to slip 1.5% to 728 billion yen in the third quarter to September.

On the overall, overseas orders plummeted 12.1% or 1 trillion in June from a gain of 21.1% or 1.23 trillion yen in May, while orders fell 3.9% or 3.33 trillion yen in the three months to June. Overseas orders are forecasted to fall 0.1% to 3.33 trillion yen in the quarter to September.

Losses for Japan’s Six Biggest Banks Rise to 1.03 trillion yen

The Nikkei News reported that cumulative losses to six largest banks in Japan from the U.S. subprime mortgages have increased to 1.03 trillion yen.

According to data compiled by 123jump.com declared losses and asset write downs to worldwide financial institutions stand at $502 billion.

Gainers & Losers

Kubota Corp led advancers in the Nikkei 225 index shares with a rise of 15.18% followed by increases in Taiyo Yuden of 10.43%, in Inpex Holdings of 6.30%, in Nikon Corp of 4.92%, and Fuji Heavy Industries of 4.37%.

Daikin Industries led decliners in the Nikkei 225 index shares with a fall of 11.09% followed by losses in Shinsei Bank of 11.09%, in Nippon Telegraph of 6.56%, in Toray Industries of 6.28%, and Shinko Securities of 5.76%.

Daikin Industries fell after first quarter operating profit declined on slowing growth in Europe.

Financial stocks also fell after Chuo Mitsui Trust Holdings reported that first quarter net income dropped 52% to 9.6 billion yen from 20 billion yen a year earlier, as ordinary profit tumbled to 19 billion yen from 34 billion yen a year ago.

Chiba Bank slumped 5.09%, Sumitomo Trust & Banking shed 4.10% and Fukuoka Financial slipped 4.55%.

Kubota Earnings Fall 16%

Kubota Corporation second quarter revenue declined 2.7% to 261.8 billion yen or $2.4 billion from a year ago period and earnings declined 16.5% to 20 billion yen or $189 million in the period. Earnings per share were 78 yen or 74 cents per ADS. Domestic sales fell 0.1% to 116.7 billion yen and international revenue fell 4.7% to 145.2 billion yen.

JAL Net Loss at 3.4 billion yen

Japan Airlines reported net loss in the first quarter ended June 30 eased to 3.4 billion yen from 4.2 billion yen in the same period a year ago, as operating income increased by 12.4 billion yen to 3.9 billion yen in the period.

The international and domestic passenger demands fell 5.7% and 0.3% respectively. However, in the air transportation segment advanced 6.1 billion yen to 428 billion yen.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 129.90 or 0.98% to 13,124.99, Hang Seng index in Hong Kong increased 154.45 or 0.70% closed to 22,104.20. ASX 200 index in Australia increased 14.20 or 0.29% to close 4,983.30. The KL Composite index in Malaysia decreased 4.03 or 0.36% closed to 1,129.56.

The Kospi Index in South Korea decreased 14.71 or 0.93% to close at 1,564.00, SET index in Thailand closed higher 29.00 or 4.29% to 705.35 and JSE Index in Indonesia increased 11.81 or 0.54% to 2,199.01. The Sensex index in India increased 43.71 or 0.29% to 15,117.25.