Nikkei Rallies in Tokyo; Dai-Ichi Life IPO

Darlington Musarurwa
01 Apr, 2010
New York City

Stocks in Tokyo advanced on the improving business sentiment. Dai-Ichi Lie Insurance initial public offering received warm reception on the first day of trading. Steel exports surged 81% in February on the rise in demand from China and Korea. Fuji Electric Holdings Co soared 7%.

[R]5:00 AM New York, 5:00 PM Tokyo – Stocks in Tokyo advanced on the improving business sentiment. Dai-Ichi Lie Insurance initial public offering received warm reception on the first day of trading. Steel exports surged 81% in February on the rise in demand from China and Korea. Fuji Electric Holdings Co soared 7% on higher earnings outlook.[/R]

Japanese stocks rose the most since October 2008 after the Tankan Survey showing business conditions are improving and the successful placement of Dai-Ichi Life Insurance public offering.

Dai-Ichi Life Insurance debuted on the Tokyo Stock Exchange with a price of 160,000 yen per share an increase of 14% from its initial public offering price of 140,000 yen per share. The stock was the most active in trading and 150.7 billion yen of shares changed hands.

Japan’s second largest insurer is valued at 1.4 trillion yen based on the IPO price, becoming the largest capitalization listing since NTT Docomo Inc 1998 debut.

Commodity stocks also advanced as the spot price of gold advanced $4.90 from yesterday’s closing price to $1,112 per ounce.

In Tokyo trading Nikkei 225 Stock Average increased 1.4% or 154.46 to 11,244.40, and the broader Topix Index edged up 0.7% to 985.26. The benchmark index is up 8.6% in 2010.

In the first section of the Tokyo Stock Exchange 10.4 billion shares valued at 678 billion yen were traded and in the second section 205 million shares worth 2 billion yen changed hands.

Of the Nikkei 225 index stocks, 164 advanced, 43 dropped, and 16 were unchanged. Fuji Electric House led gainers in the index shares with a rise of 6.7%.

Manufacturing Business Sentiment Improve

Bank of Japan reported today in its Tankan Survey business sentiment index among large manufacturer rose to -14 in the March quarter from -25 in the previous quarter.

Business conditions for medium-sized manufacturing companies increased to -19 from in the three months ended March from -28 a quarter earlier, while conditions from small manufacturing companies gained to -30 in March from -41 in the December quarter.

According to the report, profits in the manufacturing industry are forecasted to rise by 49.3% for fiscal 2010 from a decline of 21.5% in 2009.

Profits for all industries are estimated to climb to 21.1% from a decline of 15.9% in 2009.

Fixed investment is expected in all industries in expected to drop 0.4% in 2010 after falling 14.2% the previous year.

Sales in the manufacturing industry are projected to rise 3.9% in 2010 from a decrease of 13.2% in 2009.

Steel Exports Rise 81.6% to 3.42 million tons

Japan’s Iron and Steel Federation reported today that steel exports advanced 81.6% to 3.42 million tons in February, rising for the seventh consecutive month.

Export growth was boosted by strong demand recovery in Asia and sluggish demand in 2009.

Exports to South Korea gained 42% to 857,000 tons, and to China jumped 51.6% to 577,000 tons.

Shipments to the U.S. edged up 85.6% to 126,000 tons.

Nikkei Movers

Sapporo Holdings Ltd led the decliners in the Nikkei 225 Stock Average with a loss of 4.3% followed by losses in Clarion Co Ltd of 2.6%, in Credit Saison Co., Ltd of 2.0%, in Resona Holdings, Inc 1.7% and in Bridgestone Corp 1.7%.

Fuji Electric Holdings Co., Ltd led gainers in the Nikkei 225 Stock Average with a rise of 6.6% followed by gains in Hitachi, Ltd 5.4%, in Uny Co Ltd of 5.4% and in Ebara Corporation 5.0%.

Other Movers

Fanuc Ltd the maker of industrial robots advanced 2.9% to 10,210.00 yen.

Fuji Electric Holdings Co soared 6.7% to 272 yen after the company guided higher earnings on lower costs.

Mitsubishi Corporation the commodities trader added 1.5% to 2,487.00 yen.

NTT DoCoMo, Inc rose 1.3% to 144,300.00 yen.

Toshiba Corporation rose 0.8% to 487.00 yen.