Panasonic Lowers Earnings, Tokyo Stocks Up

Darlington Musarurwa
27 Nov, 2008
New York City

Stocks in Tokyo rose 2% on the hopes that the latest rate in cut in China will help exports from Japan. Toix Index gained 1.5%. Inpex soared 10% after crude oil prices increased 7%. Meidensha Corp led the gainers in Nikkei with a rise of 10.1%. Panasonic Corp lowered its full year earnings.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Tokyo rose 2% on the hopes that latest cuts in interest rate in China will sustain exports from Japan. Panasonic revises full year profit by 90%.[/R]

Stocks in Tokyo trading on commodity stocks after China lower its one-year lending rate and deposit rate to 5.58% and 2.52% respectively stoking expectation that demand for raw materials will rebound.

In [Tokyo trading Nikkei 225 increased 2% or 160.17 to 8,373.39 and the broader Topix Index edged up 1.5% or 11.81 to 829.03.

In the first section of the Tokyo Stock Exchange 7.2 billion shares worth 538 billion yen were traded and in the second section 102 million shares valued at 1.1 billion yen changed hands.

Of the Nikkei 225 stocks 164 rose, 50 declined, and 11 were unchanged. Meidensha led gainers in the index shares with a rise of 10.1% followed by Inpex soaring 10% after crude oil prices increased by 7.2% to $54.44 per barrel yesterday.

China Cuts Lending Rate to 5.58%

Peoples’ Bank of China yesterday lowered its one-year key lending rate and the deposit rate to 5.58% and 2.52% correspondingly in order to stimulate domestic economic activity in the wake of the deteriorating conditions on the global financial market.

The central bank also lowered the cash reserve requirement of biggest banks to 16% from 17%, while the requirement for smaller banks will be cut to 14% from 16% effective December 5.

Japan’s Land Prices Forecasted to Fall

Bloomberg News reported today that president of real estate appraisal firm Anyu Appraisal Corp. Akiyshi Inoue said Japan’s land prices will fall for “at least the next 15 years”.

Inoue said there has been a decline in land prices in the business districts of Marunouchi and Otemachi.

Gainers & Losers

The electrical engineering company, Meidensha led advancers in the Nikkei 225 index shares with a rise of 10.1% followed by increases in Inpex of 10%, in Sumitomo Metal Mining of 8.9%, in Sumitomo Osaka of 8.8%, and Tokyu Land Corp. of 8.7%.

Inpex rose after crude oil prices for January delivery advanced 7.2% to $54.44 per barrel after the rate cut by China spurred a rally of metal prices.

Copper futures for March delivery also rose 0.2% yesterday. Mitsui & Co. gained 7.7% and Sumitomo Corp. advanced 6.5%.

Shipping lines also soared on expectation that the rate cut by China will spark a demand for commodities. Mitsui OSK Lines edged up 7.4% and Nippon Yusen jumped 6.5%.

Fuji Heavy Industries led decliners in the Nikkei 225 index shares with a fall of 10.3% followed by losses in Tokai Carbon Co. of 6.2%, in Panasonic Corp. of 4.7%, in Minebea Co. Ltd. of 3.5%, and Nippon Paper Group of 3.3%.

Panasonic Corp. fell after it revised downwards its full year profit ended March 30, 2009 to 30 billion yen from 310 billion yen forecasted in April.

Nippon Paper Group dropped on rising energy prices.

Company News

Kyodo News reported that IBM Japan Ltd. will reduce 6% of its staff or about 1,000 jobs at the end of the year. The fiscal second quarter sales declined according to local media. The company is also expected to lower programs for retired workers.

Panasonic Corporation today lowered fiscal year 2009 earnings to 30 billion yen from 310 billion yen estimated in April.

Net sales are projected to drop to 8.5 trillion yen from an earlier estimated 9.2 trillion yen, while consolidated operating profit is projected to fall to 340 billion yen from 560 billion.

Panasonic says it expects profit to be weak on a strong yen, sluggish consumer spending and price competition, including a write-down of investment securities.