NEC,Renesas Merger; Japan $170 B Bond Offering

123jump.com Staff
16 Apr, 2009
New York City

Japan government is preparing to issue 17 trillion yen or $170 billion of bonds to fund economic expansion. Investor sentiment was low after China reported slowest economic expansion in a decade. NEC plans to merge with Renesas Technology to create the largest semiconductor company in Japan.

5:00AM New York, 7:00PM Tokyo- Japan to issue 17 trillion of bonds in 2009. NEC Electronics and Renesas Technology in merger talks.[/R]

Japan benchmark stock index was flat as investors were concerned after China reported weak first quarter growth.

China reported today its economy eased to an annualized rate of 6.1% in the three months to March, dropping the most in two decades. The slowest expansion in nearly ten years prompted fears that exports from Japan may take longer to recover.

In Tokyo trading Nikkei 225 index rose 0.1% or 12.3 to 8,755.26, and the broader Topix Index dropped 0.4% or 3.21 to 832.04.

In the first section of the Tokyo Stock Exchange 12.2 billion shares valued at 706 billion yen were traded and in the second section 472 million shares valued at 1.9 billion yen changed hands.

Of the Nikkei 225 Average stocks, 100 gained, 106 declined, and 19 were unchanged. Pac Metals led gainers in the index shares with a rise of 11% followed by Toho Zinc rising 7.3%.

Japan to Sell 17 trillion Yen of Bonds in 2009

Bloomberg News reported today that ministry of finance officials said Japan might sell 17 trillion yen of bonds this fiscal year to prop the country’s stimulus package.

According to the report government might issue 16 trillion yen to 17 trillion yen of bonds in addition to the planned 113.3 trillion yen of debt to be issued in the current fiscal year.

Extra sales will include 6 trillion yen of zaito bonds to fund loans to state-owned financial institutions.

The finance ministry will meet primary dealers tomorrow to discuss bond issuance.

Renesas Technology and NEC Electronics Corp in Merger Talks

Nikkei News reported today that NEC Electronics Corp. and Renesas Technology Corp. are in talks to integrate their businesses to weather the deteriorating on the global financial market.

NEC Electronics is forecasts to record a net loss of 65 billion yen in the fiscal year ending March, while Renesas projects a 206 billion yen net loss for the period.

The integration is likely to be completed by April 2010 and NEC Electronics will be made a surviving company.

Merger of the two companies will create a combined company with revenues of $13.71 billion last year will create the country’s largest chipmaker and the third largest in the world after Intel and Samsung Electronics Co.

Gainers & Losers

Pac Metals led advancers in the Nikkei 225 index shares with a rise of 11% followed by increases in Toho Zinc of 7.3%, in Mitsumi Electric Co. of 7%, in Sumitomo Metal Mining of 5%, in Takashimaya Co. of 5%.

Pioneer Corp. led decliners in the Nikkei 225 index shares with a decline of 8.5% followed by losses in CSK Holdings Corp. of 7.3%, in Mitsubishi Chemicals of 5.6%, in Tokyo Land Corp. of 5.1%, and Maruha Nichiro of 5%.

Financial stocks fell. Fukuoka Financial shed 4.3%, Sumitomo Trust & Banking of 3.3%, and Mitsubishi UFJ Financial Group of 3.1%.

Japan Pledges $1 billion to Pakistan

Ahead of donors meeting in Tokyo, prime minister Taro Aso pledged to as much as $1 billion to Pakistan. The meeting of 30 nations including China, Saudi Arabia, U.S. and Iran is likely to raise as much as $6 billion that Pakistan is seeking.

The past assistance to Pakistan has ended up in personal accounts of leaders and portion of these funds have also found its way to the military and spy agency ISI. The spy agency and military has used these funds to fund terrorists grouped that are linked to Taliban and have directed their jihad against westerners in Pakistan and attacks on Indian cities.

Pakistan has never accounted for what happens to funds and how it is used. During the U.S. president Bush administration Pakistan military and government received $14 billion in financial and military assistance that have never been accounted by Pakistan.