Oil, Metals Fall, Tokyo Stocks Rise

123jump.com Staff
03 Sep, 2008
New York City

Japan stocks edged higher after crude oil declined in the region to a three-month low. A steady decline in oil and natural gas prices in the last five trading session lifted stocks of consumer goods, retailing and paper and tire manufacturing companies. Mitsubishi UFJ may increase its stake in consumer lender Acom to 40% from 15%.

[R]5:00AM New York, 7:00PM - Falling oil prices spurs stocks in Tokyo. Mitsubishi to increase stake in consumer lender Acom to 40%[/R]

Stocks in Japan rose marginally and crude oil prices and other commodities prices continue to fall. Paper companies and retailers rose. However commodity stocks pared gains after metal prices also declined.

Market Sentiment

In Tokyo trading Nikkei 225 stocks edged up 0.64% or 80.12 to 12,689.59, and the broader Topix Index rose 0.7% or 8.18 to 1,220.55.

In the first section of the Tokyo Stock Exchange 8.5 billion shares valued at 878 billion yen were traded and in the second section 132 million shares worth 1.6 billion yen changed hands.

Of the Nikkei 225 stocks 129 rose, 87 declined, and 9 were unchanged. Nippon Paper Group led advancers in the index shares with a rise of 9.09% as falling oil prices reduced raw material costs.

Mitsubishi to Raise Stake in Acom to 40%

Nikkei News reported today that Mitsubishi UFJ Financial Group will shore up its stake in consumer credit lender Acom from the current 15% to 40%. The additional shares are reportedly worth $1.1 billion based on Acom’s yesterday’s closing price of 3,060 yen per share.

The lender is presently broadening its investments and recently bid $3.5 billion for the U.S. financial institution UnionBanCal a wholly owned subsidiary.

In addition, Mitsubishi UFJ recently increased its stake in consumer credit company Jaccos Co. from 6.9% to 20% and made Mitsubishi UFJ Nicos a wholly owned subsidiary.

AMB Property Corp. to Spend 200 billion yen in Japan

Reuters News reported yesterday on its Web site that U.S. warehouse concern AMB Property will spend 200 billion yen to expand its distribution facilities in Japan over the next four years, adding that the company is also considering acquisitions.

The company currently has 33 sites in Japan, particularly in the greater Tokyo area, and is looking to double the distribution facilities.

According to the report, AMB believes that transportation firms and major manufacturers that facing high oil prices and distribution costs will become more reliant on outside facilities.

Gainers & Losers

Nippon Paper Group led advancers in the Nikkei 225 index shares with a rise of 9.09% followed by increases in OJI Paper Co. of 6.93%, in Front Retailing of 5.88%, in Bridgestone Corp. of 5.57%, and Tokyo Gas Co. Ltd of 5.54%.

Nippon Paper Group and other paper companies increased after oil prices slumped, driving raw material costs lower.

J Front Retailing gained on news that the company is mulling opening Uniqlo-brand casual clothing stores in India and Russia. Seven & I Holdings also soared 4.90%.

Utilities also increased. Chubu Electric Power surged 4.09% and Kansai Electric Power spiked 4.02%.

Mitsui & Co. led decliners in the Nikkei 225 index shares with a fall of 7.26% followed by losses in Komatsu Ltd. of 7.10%, in Toho Zinc of 6.93%, in Sumitomo Metal Mining of 6.43%, and Marubeni Corp. of 6.07%.

Mitsui & Co and other commodity stocks fell after oil futures for October delivery dropped 8.7% to $105.46.

Gold futures shed 3%. Sumitomo Metal Industries declined 4.35%, Mitsubishi Corp. dipped 3.36%, Inpex fell 3.94% and Nippon Oil Corp. slumped 1.90%.

Komatsu Ltd fell after Mitsubishi UFJ cut its rating to “market perform” from “outperform.”