Lower Land Prices in Japan; Aiful Plunges 27%

123jump.com Staff
18 Sep, 2009
New York City

Consumer finance companies faced selling after Aiful plunged 27% and sought restructuring of 280 billion yen loans. Financials closed lower. Real estate companies declined after Japan reported sharpest decline in land prices in a year ending in June.

[R]8:00 AM Tokyo – Consumer finance companies faced selling after Aiful plunged 27% and sought restructuring of 280 billion yen loans. Financials closed lower. Real estate companies declined after Japan reported sharpest decline in land prices in a year ending in June.[/R]

Stocks in Tokyo traded lower as financials decline and yen strengthened ahead of five days of holiday till Sept 23. Consumer finance companies plunged after Aiful said that it is looking to restructure its debt. A government report also showed that land prices declined in the twelve months to June.

The Nikkei 225 Index in Tokyo closed lower 73.26 or 0.70% to 10,370.54

The Ministry of Land, Infrastructure, Transport and Tourism reported that in the year to June average land prices decreased 4.4%. The sharpest decline in five years comes after developers struggle to fund new construction.

Gainers & Losers

Aiful plunged 27.4% to 134 yen after the consumer finance company said that it is looking to delay debt repayment of 280 billion yen and is in discussion with Association of Turnaround Professionals. Takefuji Corp declined 9.5% and Promise decreased 0.8%.

The lenders to consumer finance companies also edged lower.

Sumitomo Trust & Banking Co dropped as much as 4.5% but recovered to close up 0.2% to 478 yen. Mitsubishi UFJ increased 2.5% to 529 yen and Aozora closed 0.7% lower.

Real estate developers declined after the release of land price survey. The eighteenth monthly decline in a row dragged some of the largest developers lower.

Mitsui Fudosan decreased 2.4% to 1,707 yen and Mitsubishi Estate dropped 2.3% to 1,548 yen.

East Japan Railway Co increased 4% to 6,460 yen after Deutsche Bank lifted target price higher 12% to 7,670 yen and kept its “buy” rating on the stock. The news was first reported by Bloomberg. West Japan Railways also closed up 2.7% to 344,000 yen.

Japan Airlines increased 2.4% and the rating agency S&P put the company debt on watch list. Qantas said that it is not negotiating with American Airlines or Delta to bid jointly to acquire a stake in the airline. British Air is looking to preserve its alliance with the airliner in the event of change of control.

Sanyo Electric decreased 3.2% to 246 yen and Panasonic Electric edged lower 0.7%. Nikkei News reported that Goldman Sachs has agreed to tender at least half of its holding to Panasonic that will facilitate the sale of troubled electronics maker.

Nikkei 200 Average Movers

Sumitomo Osaka Cement Co., Ltd. led the decliners in the Nikkei 225 index of 9.5% followed by losses in Taiheiyo Cement Corporation of 7.9%, in Sapporo Holdings Limited of 5.0 %, in Toyo Seikan Kaisha, Ltd of 4.2% and in Yamaha Corporation of 4.0%.

East Japan Railway Company led gainers in the Nikkei 225 index with a rise of 4.0% followed by gains Kubota Corporation of 3.2%, in West Japan Railway Company of 2.6% and in Mitsui & Co., Ltd of 2.6%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 73.26 or 0.70% to 10,370.54, Hang Seng index in Hong Kong decreased 145.06 or 0.67% to 21,623.45 and CSI 300 index in China lower 120.41 or 3.63% to 3,199.69. ASX 200 index in Australia decreased 21.70 or 0.46% to 4,693.20. The FTSE Bursa KL Composite index in Malaysia closed higher 2.40 or 0.20% to 1,221.20.

The Kospi Index in South Korea increased 4.24 or 0.25% to close at 1,699.71. SET index in Thailand closed higher 4.44 or 0.63% to 713.67 and JSE Index in Indonesia increased 17.63 or 0.72% to 2,456.99. The Sensex index in India increased 30.19 or 0.18% to 16,741.30.