Toshiba in $5 B Offering; Steel Output Drops

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

Japan crude steel output plunged 46.7% in March as production of autos and industrial machinery declined. Hitachi may access public funds. Toshiba is preparing to raise 500 billion yen in public stock and bond offering. Consumer lenders dropped after Promise reported a net loss on higher charges.

[R][5:00AM New York, 7:00PM - Japan crude steel output plunged 46.7% in March. Hitachi may access public funds. Toshiba is preparing to raise 500 billion yen in public stock and bond offering.[/R]

The benchmark stock index increased 0.2% in Japan buoyed by steelmakers after a brokerage upgraded the sector to “bullish.”

Financial stocks pared gains after Japan’s second biggest consumer finance company Promise Co. announced last week a net loss of 127 billion yen for the year ending March 31.

In Tokyo trading Nikkei 225 increased 0.2% or 17.17 to 8,924.75, and the broader Topix Index edged up 0.3% or 2.73 to 848.30.

In the first section of the Tokyo Stock Exchange 10.2 billion shares worth 588 billion yen were traded and in the second section 144 million shares valued at 1.9 billion yen changed hands.

Of the Nikkei 225 index stocks, 111 gained, 102 declined, and 12 were unchanged. GS Yuasa Corp. led gainers in the index shares with a rise of 11.5% followed by Kobe Steel advancing 9.1%.

Toshiba Seeking 500 billion yen Boost

JapanToday reported today that Toshiba Corp. is preparing to raise 500 billion yen in capital to rebuild the semiconductor business and other units that need large capital investment.

The report notes while the company hasn’t finalized the specifics of the fundraising methods, 300 billion yen will be raised in stock offering and 200 billion yen will be raised through selling subordinated bonds to banks and other public institutions by September.

Traders and analysts are speculating that the conglomerate may seek a state-sponsored rehabilitation program.

The company plans to eliminate 3,900 temporary jobs in a restructuring by March 2010.

Toshiba expects a group net loss of 250 billion yen for the fiscal year ending March 31, while the capital-to-asset ratio is forecasted to drop from 17.2% to 8.2%.

Crude Steel Output Drops 46.7%

Nikkei News reported Japan’s Iron and Steel Federation said today the domestic crude steel production in March declined 46.7% to 5.74 million tons from the same period a year earlier.

Yen Falls

The yen fell 0.5% against a dollar to 98.90 from 98.87.

Gainers & Losers

GS Yuasa Corp. led gainers in the Nikkei 225 index shares with a rise of 11.5% followed by increases in Kobe Steel of 9.1%, in Tokai Carbon Co. of 7.5%, in Japan Steel Work of 7.1%, and Sumitomo Metal Industries of 7%.

Steelmaker rose as Nomura raised its rating for the industry to """"""""bullish."""""""" The brokerage also upgraded Sumitomo Metal Industries and Kobe Steel to """"""""buy"""""""" from """"""""neutral.""""""""

JFE Holdings gained 6.9%.

Shipping lines rose as a gauge of freight charges for raw materials increased. Mitsui O.S.K. Lines advanced 2.9% and Nippon Yusen K.K. gained 1.1%.

Toshiba Corp. led decliners in the Nikkei 225 index shares with a decline of 4.8% followed by losses in J Front Retailing of 4.8%, in Japan Tobacco of 4.6%, and Oki Electric Industries of 4.6%, and KDDI Corp. of 4.5%.

Mizuho Trust & Banking dipped 3.8% and Mitsubishi UFJ Financial Group plunged 3.3%.

Financial stocks dropped after consumer finance company Promise Co. reported last week its net loss for the year ending March 31 soared to 127 billion yen.

Hitachi to Seek Public Funds

Nikkei News reported today that Hitachi Ltd. president Takashi Kawamura is considering to applying for injections of public funds into several business units.