Financials Rise in Tokyo; Toyota Estimates Loss

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

Financials and insurers surged after the U.S. regulators required only ten banks to raise $75 billion. Investor were cautious after larger than expected loss at Toshiba and an estimate of loss at Fuji Heavy Industries. Toyota annual sales declined 22% and estimated operating loss in fiscal 2010.

[R]5:00AM New York, 7:00PM Tokyo – Financials and insurers surged after the U.S. regulators required only ten banks to raise $75 billion. Investor were cautious after larger than expected loss at Toshiba and an estimate of loss Fuji Heavy Industries. Toyota Motor annual sales declined 22% and estimated operating loss in the current year.[/R]

Toshiba Co. Loss Soars to 343.6 billion yen.[/R]

Stocks in Tokyo closed higher after U.S. regulators released results of much awaited stress tests on 19 largest banks. Ten banks were asked to raise $75 billion, lower than most analysts had predicted. However, the results failed to quiet the debate whether the tests were stressful enough.

Investors were unnerved after Toshiba reported higher losses in 2008 and Fuji Heavy Industries estimated a loss but the appliance and electronics retailer Yamada Denki Company lifted its earnings outlook.

In Tokyo trading Nikkei 225 index gained 0.5% or 47.13 to 9,432.83, rising 5.5% for the week, and the broader Topix Index gained 1.1% or 9.42 to 895.35, increasing 5.7% for the week.

Of the Nikkei 225 Stock Average stocks 151 advanced, 68 plunged, and 6 were unchanged. Financial companies, brokers and insurance companies led the gainers.

Sompo Japan Insurance led gainers in the index shares with a rise of 9.5%.

Japanese financial services companies surged after the U.S. regulators asked only ten banks to raise $75 billion. Mitsubishi UFJ with a stake in Morgan Stanley advanced 6.2% to 655 yen, Mizuho Financial with a stake in Merrill Lynch increased 6% to 246 yen and Nomura Holdings Inc that purchased the Asian operations of Lehman Brothers added 6.6% to 695 yen.

Fuji Heavy Industries declined 5.6% to 406 yen after it estimated net loss of 55 billion yen.

U.S. Regulators Ask 10 Banks to Raise $75 Billion

U.S. Federal Reserve reported yesterday that nine of the country’s 19 largest bank holding corporations do not need additional capital buffer.

JPMorgan Chase & Co., brokerage house Goldman Sachs Group Inc., insurer MetLife Inc. and credit card companies Capital One Financial Corp. and American Express Co. were among those institutions that did not require additional capital.

However the stress test revealed that the remaining 10 financial institutions needed to raise $75 billion to build capital buffer to withstand possible adverse economic conditions.

According to regulators, Bank of America Corp. needs $33.9 billion, Wells Fargo & Co. $13.7 billion, GMAC LLC $11.5 billion, Citigroup Inc. $5.5 billion and Morgan Stanley $1.8 billion. Ten banks have till November to raise the needed capital buffer.

Other regional banks that need additional capital include Regions Financial Corp. of Birmingham, Ala.; SunTrust Banks Inc. of Atlanta; KeyCorp of Cleveland; Fifth Third Bancorp of Cincinnati; and PNC Financial Services Group Inc. of Pittsburgh.

The stress tests are meant to restore investor confidence and prepare banks with additional capital buffer.

Toshiba Net Loss Rises

Toshiba Co. reported today that company’s net loss fell by 471 billion from a year earlier to 343.6 billion yen in the fiscal year ending in March 2009.

Net annual sales dropped by 1 trillion yen to 6.7 trillion yen on declining demand, a firming yen and an unexpected drop in semiconductor prices.

The company’s consolidated operating income dropped by 496.6 billion yen to 250.2 billion yen.

Net sales in digital products fell 16% to 2.5 trillion yen, electronic devices dipped 24% to 1.3 trillion yen, home appliances shed 13% to 674 billion yen and other devices declined 12% to 334 billion yen.

Toyota Estimates Operating Loss in Fiscal 2010

Toyota Motor Corporation reported after the closed 21.9% decline in annual revenue and net loss of 437 billion yen. In the fiscal year the auto maker sold 1.34 million fewer vehicles with a total of 7.57 million.

The automaker forecasted for the current fiscal year ending in March 2010 revenues of 16.5 trillion yen and operating loss of 850 billion yen based on the exchange rate of 95 yen to a dollar and 125 yen to a euro.

In Japan, vehicle sales were 1.95 million units, a decrease of 243 thousand units compared to the last fiscal year. Operating income from Japanese operations decreased by 1.68 trillion yen to a loss of 237.5 billion yen.

In North America, vehicle sales totaled 2.21 million units, a decrease of 746,000 units. Operating income decreased by 695.5 billion yen to a loss of 390.2 billion yen including 73.9 billion yen of valuation losses from interest rate swaps. Operating income excluding the impact of valuation losses on interest rate swaps decreased by 713 billion yen, to a loss of 316.3 billion yen, mainly due to decreases in both production and vehicle sales.

In Europe, vehicle sales were 1.06 million units, a decrease of 222,000 units. As a result, operating income decreased by 284.8 billion yen to a loss of 143.3 billion yen.

In Asia, vehicle sales were 905,000 units, a decrease of 51,000 units. Operating income decreased by 80.3 billion yen, to 176.1 billion yen.

[Nikkei 2225 Stock Average Movers

JTEKT Corporation led the decliners in the Nikkei 225 index of 12.3% followed by losses in Mitsui Mining & Smelting Co Ltd of 6.0%, in FUJI heavy Industries of 5.5%, in Suzuki Motor Corporation of 3.6% and in Showa Denko K.K of 3.5%.

Sompo Japan Insurance Inc led gainers in the Nikkei 225 index with a rise of 9.4% followed by gains in Mitsubishi Rayon Company, Limited of 8.4%, in Konica Minolta Holdings, Inc. of 7.9% and Daiwa Securities Group Inc of 7.0%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 47.13 or 0.50% to 9,432.83, Hang Seng index in Hong Kong increased 171.98 or 1.00% closed to 17,389.87, CSI 300 index in China higher 22.14 or 0.80% closed to 2,789.22. ASX 200 index in Australia increased 3.00 or 0.08% closed to 3,941.70. The KL Composite index in Malaysia higher 3.31 or 0.32% closed to 1,026.78.

The Kospi Index in South Korea increased 11.05 or 0.79% to close at 1,412.13. JSE Index in Indonesia increased 33.68 or 1.84% closed to 1,862.53. The Sensex index in India decreased 240.51 or 1.98% closed to 11,876.43. The Markets of Thailand were closed today.