Tokyo Surges 6%, Nomura, Honda Earnings

123jump.com Staff
28 Oct, 2008
New York City

Stocks in Tokyo trading closed up 6% after a rebound in the afternoon session. The yen fell from its record high against euro and 13-year high against dollar. September retail sales in Japan dropped 0.4%. Honda Motor lowered its forecast for full year net and second quarter net dropped 41%.

[R]5:00AM New York, 7:00PM Tokyo - Japan''s retail sales fall 0.4% in September. Tokyo Stock Exchange bans naked short-selling.[/R]

Stocks in Japan rebounded from a 26-year low to rise 6% on bargain hunting. The benchmark index Nikkei 225 had earlier declined below 7,000 in the morning but recovered after yen dropped from its record high against euro and from a 13-year high against dollar.

Market Sentiment

In Tokyo trading Nikkei 225 increased 6.4% or 459.02 to 7,621.92, and the broader Topix Index rose 5% or 37.57 to 785.03.

In the first section of the Tokyo Stock Exchange 12.6 billion shares valued at 835 billion yen were traded and in the second section 172 million shares worth 1.5 billion yen changed hands.

Of the Nikkei 225 index stocks 202 rose, 21 declined, and 2 were unchanged. Tokai Carbon Co. led advancers in the index shares with a rise of 24.8% followed by Sanyo Electric increasing 22.8%.

Japan Bans Short-Selling

Japan''s Finance Minister Shoichi Nakagawa announced today it has brought forward the scheduled date for the ban on naked short selling from November 4 to today. Through naked short-selling, traders sell stocks before borrowing them speculating that prices will drop.

Nakagawa said the ban has been enforced today because of the marked deterioration in the financial markets.

Retail Sales Drop 0.4% in September

Japan''s Ministry of Economy, Trade and Industry reported that retail sales in September fell 0.4% to 10 trillion yen, while commercial and wholesale sales gained 3.1% to 53 trillion yen and 4% to 42 trillion yen respectively.

Mitsubishi UFJ to Issue Preferred Shares to Raise Capital

Mitsubishi UFJ Financial Group reported yesterday that it plans to issue """"bond type"""" preferred shares through a third party allotment in order to boost its capital and sponsor its expansion process.

The shares can be acquired by the lender at the same price as the issue price after sixty four months.

MUFJ is seeking to raise over 900 billion yen.

Gainers & Losers

Tokai Carbon Co. led advancers in the Nikkei 225 index stocks with a rise of 24.8% followed by increases in Sanyo Electric of 22.8%, in Isuzu Motors of 21%, in OKI Electric Industries of 20.9%, and Nippon Steel of 20.5%.

Mitsui Fudosan led decliners in the Nikkei 225 stocks with a fall of 15% followed by losses in Sumitomo Mitsui of 13%, in Sumitomo Realty of 12.2%, in Mitsubishi Estate Co. of 12.2%, and Softbank Corp. of 11.7%.

Financial stocks dropped after Mitsubishi UFJ Financial Group reported yesterday that it will issue preference shares. The stocks fell 2.40% as a result.

Mizuho Financial Group declined 6.57%.

Earnings Review

Nomura Holdings Inc. net revenue fell 49.5% to 263.2 billion yen from a year earlier in the six month period ending September 30. Losses before income taxes were 153.6 billion yen in the review period. Net loss in the period was 149.5 billion yen.

Revenue from investments in equity securities fell 50.5% from a year ago to 270.8 billion.

Nomura may spend about $2 billion to take over 8,000 employees from Lehman Brothers Holdings Inc after purchasing its business units in Europe, Asia and the Middle East.

Honda Motor Co. net income in the second quarter ended September 30 fell 41% from 208.5 billion yen a year ago to 123.3 billion yen on slowing demand and a rising yen.

Operating profit in North America declined 81% after yen rose and sales declined on high gasoline prices.

The company lowered its full year operating profit forecast by 13% to 550 billion yen, while full-year profit is expected to drop to 485 billion yen.