Citi Sells Nikko; Fujitsu, Itochu, Softbank Rise

123jump.com Staff
01 May, 2009
New York City

Stocks in Japan traded higher for the second day in a row after better than expected earnings from Softbank, Itochu and Fujitsu. Showa Denko plunged on weak outlook. Sumitomo Mitsui has agreed to pay $5.5 billion to acquire Nikko Cordial from Citigroup for $5.5 billion.

[R]7:00PM Tokyo, 8:00AM New York – Stocks in Japan traded higher for the second day in a row after better than expected earnings from Softbank, Itochu and Fujitsu. Showa Denko plunged on weak outlook. Sumitomo Mitsui has agreed to pay $5.5 billion to acquire Nikko Cordial from Citigroup for $5.5 billion.[/R]

The Nikkei 225 Stock Average increased 1.7% or 149.11 to close at 8,977.37 and the broader Topix Index increased 9.06 or 1.1% to 846.85.

Sumitomo Mitsui Financial Group agreed to pay $5.56 billion to acquire Nikko Cordial Securities and parts of investment banking unit from Citigroup. The Citi will retain asset management, credit card and retail banking divisions for now.

The sale will provide the critical cash to embattled bank that is struggling with capital adequacy to meet regulatory requirements and may be required to raise more capital in the near future.

Softbank Corp surged 10.7% or 167 yen to 1,717 yen after it reported fiscal year ending in March 2009 sale declined 3.7% to 2.67 trillion yen or $22 billion and net income plunged 60.3% to 40 billion yen. Diluted earnings per share declined to 38.64 yen compared to 95.90 yen a year ago.

For the year the company added 2.04 million net new subscribers totaling 20.63 million subscribers at the end of the year. The average revenue per user declined to 4,070 yen and churn rate in the year dropped 0.32% to 1%.

The company has 2.4 trillion yen of interest bearing debt and has repaid 181 billion yen in the fiscal year that ended in March. The company plans to replay all the interest paying debt ahead of schedule.

Earnings announcements sustained positive sentiment for the second day in a row.

Fujitsu increased 18% to 496 yen after it estimated annual earnings. Net sales in the fiscal year declined 12% to 4.6 trillion yen or $49 billion and lost 112 billion yen compared to net income of 48 million yen.

The technology services provider projected operating income of 80.0 billion yen, an increase of 11.2 billion yen compared to fiscal 2008. But for the first half the company projected net sales declined of 10% to 2.2 trillion yen and operating loss of 50 billion.

Itochu Corporation, one of the largest trading houses that import commodities soared 10% to 578 yen after it reported sales increase of 1.6% to 12 trillion yen and net declined of 23.9% in the year to 165 billion yen. For the current fiscal year net sales are expected to decline 16.6% and net income is estimated to 21.4% to 130 billion yen.

Showa Denko declined more than 7% after it estimated net loss in the current year.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 149.11 or 1.69% to 8,977.37. ASX 200 index in Australia decreased 10.90 or 0.29% closed to 3,769.60. The JSE Index in Indonesia increased 6.82 or 0.40% closed to 1,729.58.

The Markets of South China, Hong Kong, India, Malaysia, Korea, Thailand and India were closed today.

Europe Markets Review

In London FTSE 100 Index traded higher 3.08 or 0.07% to 4,246.79.The Markets of Paris, Frankfurt and Zurich were closed today.