Tokyo Stocks Rise; Dividend Capture

123jump.com Staff
25 Mar, 2009
New York City

Stocks in Tokyo closed higher for the eight day in a row on the optimism that the world economies may recover as wealthiest nations commit more funds ahead of G20 nations meeting in London on April 2. Market ignored the sharp plunge in exports in February data.

[R]11:30AM New York, 11:30PM Tokyo – Stocks in Japan closed mixed but the broader index Topix closed higher for the eighth day in a row. Exports in February plunged.[/R]

Stocks in Tokyo closed higher for the eight day in a row on the optimism that the world economies may recover as wealthiest nations commit more funds ahead of G20 nations meeting in London on April 2. Market ignored the sharp plunge in exports in February data.

The Nikkei 225 index closed decreased 8.31 or 0.1% to 8,479.99 and broader Topix index increased 5.77 or 0.7% to 818.49.

Dividend Capture

The dividend calendar also played a part in the daily trading today. Utilities and telecom stocks led the gainers on the last day of dividend rights. Most utilities are paying between 2% and 4% in dividend, substantially higher than 1.255% yield of 10-year Japan government bond.

The second largest mobile telecom operator KDDI surged 6% to 478,000 yen, JFE added 4.4% to 2,370 yen with dividend yield of 3.4% and Tokyo Electric Power Co increased 4.2% to 2,620 yen with dividend yield of 2.3%.

February Exports Tumble

Japan reported one of the worst declines in monthly exports in February. Exports in the month declined 49.4% from a year ago and exports to the largest market U.S. plunged 58.4%. The largest export category, autos, dropped 71% and is likely to not recover for at least another two months.

The weak exports suggest that the first calendar quarter GDP decline may be as severe as the decline in last calendar quarter of 12.1%.

Kubota Forecasts Weak 2009 Sales

Kubota Corp, the largest tractor maker in Asia reported weak sales and earnings in the year 2009. The company expects to still earn a profit but anticipates sale in the U.S. slide sharply. For the year the company expects sales in U.S. to drop 15% and for the company to decline between 6% and 9%.

The excavator company’s Managing Director Tetsuji Tomita in a local television interview suggested that sales in Asia are expected to be stronger for the next three years and estimated sales of as much as 300 billion yen by 2014. The company is planning to build an assembly facility in China meet the rising demand in the country.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 8.31 or 0.10% to 8,479.99, Hang Seng index in Hong Kong decreased 288.23 or 2.07% closed to 13,622.11, CSI 300 index in China lower 50.46 or 2.06% closed to 2,401.33. ASX 200 index in Australia increased 29.30 or 0.82% closed to 3,609.30. The KL Composite index in Malaysia higher 0.89 or 0.10% closed to 878.81.

The Kospi Index in South Korea increased 7.32 or 0.60% to close at 1,229.02. SET index in Thailand closed lower 1.24 or 0.28% to 436.92 and JSE Index in Indonesia decreased 16.14 or 1.12% closed to 1,419.97. The Sensex index in India increased 196.86 or 2.08% closed to 9,667.90.