Tokyo Stocks Drop on Nomura $3 Billion Plan

123jump.com Staff
24 Feb, 2009
New York City

Japan stocks fell 1.5% as investors were unsettled by news that Nomura Holdings will issue shares at a premium in order to boost its balance sheet. However, losses were trimmed by a falling yen, which slumped the most in three months against the dollar to 95.85 yen from 94.61 yen yesterday.

[R]5:00AM New York, 7:00PM Tokyo - Japan’s domestic corporate goods price index falls 0.9% in January. Nomura plans to raise $3 billion to shore its capital base.[/R]

Japan stocks fell 1.5% as investors were unsettled by news that Nomura Holdings will issue shares at a premium in order to boost its balance sheet. However, losses were trimmed by a falling yen, which slumped the most in three months against the dollar to 95.85 yen from 94.61 yen yesterday.

Nomura Holdings Inc dropped 9.3% to 420 yen after it filed with the regulators to raise as much as 291 billon yen (or $3.1 billion).

Market Sentiment

In Tokyo trading Nikkei 225 fell 1.5% or 107.6 to 7,268.56, and the broader Topix Index slid 0.7% or 5 to 730.28.

In the first section of the Tokyo Stock Exchange 9.7 billion shares worth 535 billion yen were traded and in the second section 119 million shares valued at 998 billion yen changed hands.

Of the Nikkei 225 index stocks, 50 rose, 166 declined, and 9 were unchanged. GS Yuasa Corp. led advancers in the index shares with a rise of 5.8%.

Corporate Goods Price Index Drops 0.9% to 92 in January

Bank of Japan reported today that the country’s corporate goods price index fell 0.9% from a month ago and 2.2% from a year earlier to 92.8 in January, while the domestic corporate goods price index slid 1% from December and 0.2% from a year ago in the review period.

Separately, the central bank also conducted money market operations yesterday through which it provided an unlimited amount to financial institutions at 0.1% as part of measures to stabilize the domestic markets and financial system.

Bank of Japan noted in minutes published today board member Miyako Suda preferred that companies borrow from banks or sell commercial paper to the central bank.

In addition some board members also urged the apex bank to fundamentally review the yields that are offered on term instruments on current low benchmark interest rates.

Yen Falls to 3-month Low

The yen today weakened to as low as 95.85 against the dollar from 94.61 yesterday.

Gainers & Losers

GS Yuasa Corp. led advancers in the Nikkei 225 index shares with a rise of 5.8% followed by increases in Isuzu Motors of 5.4%, in Minebea Co. Ltd of 3.6%, in Tosoh Corp. of 3.6%, and Unitika Ltd. of 3.6%.

Exporters advanced as yen weakened to a 12-week low against the dollar. Toshiba Corp. increased 2.8% and Panasonic edged up 2.7%.

Nomura Holdings led decliners in the Nikkei 225 index shares with a decline of 9.3% followed by losses in Marui Group of 8.7%, in Mazda Motor of 7.6%, in Taiheiyo Cement of 7.3%, and Aeon Co. Ltd. of 7.3.

Commodity related stocks fell as gold prices dipped 0.7% to $995 per ounce and crude oil prices shed 4.14% to $38.4 per barrel. JFE Holdings shed 5.3%, Nippon Mining House slipped 5.3% and Toho Zinc declined 5%.

India Approves NTT DoCoMo’s Acquisition of Tata Teleservices

Reuters News reported yesterday that India’s home minister P. Chidambaram said Japan’s NTT DoCoMo acquisition of a 27.3% stake in Tata Teleservices Ltd. has been approved.

DoCoMo has also been allowed to purchase 20.25% in Tata Teleservices listed subsidiary Tata Teleservices (Maharashtra) Ltd.

Chidambaram said the deal is worth 129.24 billion rupees in foreign direct investment.