Japan Stocks Up 2.7%, Sumitomo Mitsui Net Drops

Darlington Musarurwa
14 Nov, 2008
New York City

Stocks in Japan rose 2.7% today but dropped 1.4% for the week. Dix Kuroki Co. files for bankruptcy with 18.1 billion yen liabilities. Unemployment insurance claims soar 2.6% in September. Sumitomo Mitsui Financial Group first half profit fell 51% on credit market losses rose to 302 billion yen.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Japan rose 2.7% today but dropped 1.4% for the week. Dix Kuroki Co. files for bankruptcy with 18.1 billion yen liabilities. Unemployment insurance claims soar 2.6% in September.[/R]

Japan market averages closed up today and for the week lost 1.4%. Investors returned to buy after market index reached near 8,000.

A falling yen also lifted market sentiment.

Dix Kuroki Co’s bankruptcy filing and solvency warnings from Azel Corp. however sparked market jitters.

In Tokyo trading Nikkei 225 index rose 2.7% or 223.75 to 8,462.39.

In the first section of the Tokyo Stock Exchange 20.9 billion shares worth 1.7 trillion yen were traded and in the second section 406 million shares valued at 2.9 billion yen changed hands.

Of the Nikkei 225 stocks 174 rose, 45 declined, and 6 were unchanged. Konica Minolta led advancers in the index shares with a rise of 13% followed by Dentsu Corp with a rise of 11.6%.

Dix Kuroki Co Files For Bankruptcy

Nikkei News reported today that Japanese real estate company Dix Kuroki Co. has filed for bankruptcy protection with the Fukuoka District Court with 18.1 billion yen in liabilities.

The company disclosed in a filing with the Tokyo Stock Exchange.

Separately, Azel Corp. also announced that it has reservations about its viability and might default on its debt obligations.

Unemployment Insurance Claims Rise 2.6%

Japan’s Ministry of Health, Labour and Welfare reported that number of people receiving benefits under the national unemployment insurance program advanced 2.6% in September to 606,000 from a year earlier, increasing for the first time in 16 months.

The number of general jobless benefit recipients, excluding seasonal workers, fell to as low as below 500,000 in March as declined for six successive years ending fiscal 2007.

Japan to Lend $100 billion to IMF

Prime Minister Taro Aso said is ready to lend $100 billion to the International Monetary Fund and proposed a general capital increase for the Asian Development Bank.

Aso blamed the global financial crisis to individual government’s failure to monitor and regulate the emergence of new financial products.

“Japan is prepared to lend a maximum of $100 billion to the IMF as an interim measure before a capital increase takes place,” said Aso in a statement before the G-20 meeting that begins in Washington today.

IMF has spent close to $30 billion in emergency loans to Iceland, Hungary and Ukraine.

Gainers & Losers

Konica Minolta Holdings led advancers in the Nikkei 225 index shares with a rise of 13% followed by increases in Dentsu Corp. of 11.6%, in Kirin Holdings of 9.5%, in Inpex Holdings of 9.2%, and Advantest Corp. of 9.1%.

Inpex Holdings climbed after oil prices soared 2$ to $58.2 per barrel as OPEC said it might convene a meeting early as oil prices continue to decline.

Exporters increased after the yen dropped to 98.09 from 95.62 yesterday against the dollar and fell to 125.73 from 119.23 against the euro. Bridgestone rose 5.3% and Panasonic Corp. gained 3.8%.

Mitsubishi Rayon Co. led decliners in the Nikkei 225 index shares with a fall of 6.5% followed by losses in Nippon Sheet Glass of 5.1%, in Mizuho Financial Group of 4.6%, in Mitsui Fudosan of 4.5%, and Kajima Corp. of 4.4%.

Realty stocks also slid as Dix Kuroki Co. filed for bankruptcy. Tokyu Land Corp. dropped 4% and Mitsubishi Estate Co. shed 3%.

Company News

Aozora Bank reported today that the lender’s directors and executive officer’s average salaries will be slashed by 30% and 20% respectively after the 28 billion yen loss in the interim period ending September 30.

The cut will be effective from October 1.

Sumitomo Mitsui Financial Group also reported today that profit fell 51% to 83.2 billion yen in the first six months ending September 30 as credit market related losses gained 110% to 302.1 billion yen.