Shippers Rebound, Urban Files Bankruptcy

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

Urban Corp, one of the leading listed real estate developers in Japan filed for a court protection. The filing spurred concerns among banks and other real estate management funds of losses. K.K. DaVinci, largest real estate manager in Japan dropped 11% and Kansai Urban declined 8% to a five-year low. NTT Urban declied 4% as well. Separately, Baltic Dry Index rose 1.5% after dropping for a month as crude oil traded higher and demand for ocean freight remained stable.

[R]5:00AM New York, 7:00PM Tokyo – Urban Corp bankruptcy filing dragged market averages lower on a day when commodities and shipping lines rallied.[/R]

Japan stock indexes fell today after the developer Urban Corp decided to file for bankruptcy upstaged a rally in commodities related companies and shipping lines.

Market Sentiment

In Tokyo trading Nikkei 225 declined 0.51% or 66.25 to 12,956.80, and the broader Topix Index dropped 0.6% or 7.55 to 1,238.93.

In the first section of the Tokyo Stock Exchange 8.9 billion shares valued at 955 billion yen were traded and in the second section 136 million shares worth 2.1 billion yen changed hands.

Of the Nikkei 225 stocks 82 rose, 130 declined, and 13 were unchanged. Sumitomo Metal Mining led advancers in the index shares with a rise of 5.13% as crude oil prices rose to $116 per barrel and metal prices gained.

Urban Corp Files for Bankruptcy

Urban Corp. reported yesterday on its Web site that the company has resolved to file a petition for the commencement of proceedings for civil rehabilitation with the Tokyo District Court.

The company, which has interests in real estate securitization, apartment units, and asset management, was adversely affected by the stall in the real estate market from the global financial market credit crunch.

As a result, since last year Urban Corporation has been finding it increasingly difficult to secure new funds through new loans and to refinance short-term loans. Similarly, the company has been experiencing difficulties in selling developed properties.

Deteriorating conditions in the real estate investment market further compromised the alliance and capital tie-ups that the organization pursued to augment its funds and supplement credit.

Urban Corp.’s liabilities presently stand at 255.8 billion yen.

Gainers & Losers

Sumitomo Metal Mining led advancers in the Nikkei 225 index shares with a rise of 5.13% followed by rises in Kawasaki Kisen of 5.04%, in Mitsui OSK Lines of 4.21%, in Sompo Japan Insurance of 3.88%, and Tokai Carbon Co. of 3.45%.

Other commodity prices increased as metal prices rose yesterday. JFE Holdings jumped 3.13% and Mitsui & Co advanced 2.55%.

Energy companies increased as crude oil for September delivery rose 2.7% to $116 a barrel and refiner Inpex climbed 2.71%.

Kumagai Gumi Co led decliners in the Nikkei 225 index shares with a fall of 17.10% followed by losses in Bank of Yokohama of 7.11%, in Pioneer Corp. of 6.40%, in Softbank Corp of 4.60%, and Tokyu Land Corp. of 4.24%.

Kumagai Gumi Co and other property developers slumped as Urban Corp filed for bankruptcy. Kajima Corp slumped 3.63% and Mitsui Fudosan plunged 2.37%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 66.25 or 0.51% to 12,956.80, Hang Seng index in Hong Kong increased 99.39 or 0.47% closed to 21,392.71. ASX 200 index in Australia increased 29.50 or 0.60% to close 4,981.10. The KL Composite index in Malaysia decreased 3.10 or 0.28% closed to 1,109.43.

The Kospi Index in South Korea increased 9.47 or 0.61% to close at 1,572.19, SET index in Thailand closed higher 4.00 or 0.57% to 705.60 and JSE Index in Indonesia increased 43.12 or 2.09% to 2,106.64. The Sensex index in India decreased 368.94 or 2.44% closed to 14,724.18.