Japan Automakers Rally, Shippers Fall

123jump.com Staff
02 Jun, 2009
New York City

Stocks in Japan continue to edge higher on a rise in commodities prices, optimistic views on the global economy and international trade and a prospect of market share gains after the fall of GM. Sony Financial plunged 14% after it lowered its estimate of net holdings.

[R]8:00 PM Tokyo, 9:00 AM New York – Stocks in Japan continue to edge higher on a rise in commodities prices, optimistic views on the global economy and international trade and a prospect of market share gains after the fall of GM.[/R]

After a daily rally for a week and a surge of more than 25% in the last six weeks, Tokyo stocks closed higher today.

Manufacturing and exports related stocks led the gainers. The Nikkei 225 Index in Tokyo closed higher 26.56 or 0.27% to 9,704.31.

Investors have taken optimistic view that global economic stimulus around the world will support an economic recovery and a rebound in international trade. The freight rates for shipments have surged from the bottom in March and shipping companies in Japan have surged as well.

The rally is driven by companies in commodities, shipping and export sectors.

Gainers & Losers

General Motors bankruptcy filing sent ripple effects in Asia and in Japan.

Isuzu Motors Ltd. decreased 0.6% to 162 yen, Suzuki Motors fell 10% to 2,100 yen and Enshu Ltd edged 2.7% lower to 73 yen. Isuzu said that it may be able to collect 1.65 billion yen from GM and Enshu may lose 314 million yen.

Suzuki Motor will continue its relationship with GM and said in a statement that it has 29.4 billion yen in receivables from the bankrupt U.S. automaker group of companies. The small car maker has additional exposure of 40 billion yen to various affiliate of GM in Canada and Europe.

The fate of production facility co-owned by Toyota and GM in California is not clear.

Three large auto makers in Japan rose after GM files for bankruptcy and said it may close down as many as 20 plants and lay-off 21,000 people and eliminate several brands including Pontiac, Saab, Hummer and sell Opel and Vauxhall.

Toyota Motor closed up 0.8% to 3,850 yen, Honda increased 2.2% to 2,820 yen and Nissan edged up 1.7% to 594 yen.

Japanese, Korean and European makers are expected to benefit from the GM and Chrysler bankruptcy.

Sony Financial plunged 14% to 241,400 yen after it reported yesterday that the net business value declined to 15.4 billion yen from 48.4 billion yen.

Shipping lines fell after rising nearly 35% from the bottom in March as the freight rate index recovered.

Nippon Yusen decreased 1.7% to 471 yen, Mitsui O.S.K. Lines Ltd. fell 2.9% to 698 yen and Kawasaki Kisen Kaisha declined 2.2% to 45 yen.

Nomura Real Estate Holdings Inc declined 4.8% to 1,585 yen after the real estate developer confirmed the plans to raise 64 billion yen in a rights offering to domestic investors and the parent company.

Nikkei 200 Average Movers

Toho Zinc Co. Ltd led the decliners in the Nikkei 225 index of 3.9% followed by losses in Sumitomo Osaka Cement Co. Ltd. of 3.7%, in Fukuoka Financial Group Inc. of 3.6%, in T&D Holdings, Inc of 3.5% and in Dowa Holdings Co Ltd of 3.4%.

Sumitomo Heavy Industries, Ltd. led gainers in the Nikkei 225 index with a rise of 8.1% followed by gains in NTN Corp. of 5.9%, in Marui Group Co Ltd, of 5.2% and Meidensha Corp of 5.1%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 26.56 or 0.27% to 9,704.31, Hang Seng index in Hong Kong decreased 499.51 or 2.64% closed to 18,389.08, CSI 300 index in China higher 6.76 or 0.24% closed to 2,865.10. ASX 200 index in Australia increased 60.90 or 1.56 % closed to 3,955.30. The KL Composite index in Malaysia higher 1.82 or 0.17% closed to 1,063.62.

The Kospi Index in South Korea decreased 2.25 or 0.16% to close at 1,412.85. SET index in Thailand closed lower 5.68 or 0.98% to 574.30 and JSE Index in Indonesia increased 0.06 or 0.00% closed to 1,998.64. The Sensex index in India increased 34.28 or 0.23% closed to 14,874.91.