Japanese Stocks Climb, Led by Mizuho, Panasonic; SingTel Drops
Nov. 4 (Bloomberg) — Japanese stocks rose, as the lowest borrowing costs in more than six weeks and declining corporate bond risk boosted optimism the credit crisis is abating.
Mizuho Financial Group Inc. jumped 4 percent and Shinhan Financial Group Co. gained 5.3 percent after the London interbank offered rate declined for a 16th day. Panasonic Corp., the world’s largest maker of consumer electronics, climbed 4.7 percent on speculation it will buy Sanyo Electric Co. Singapore Telecommunications Ltd., Southeast Asia’s largest telephone company, declined 6.4 percent after saying second-quarter profit will be hurt by currency movements.
The MSCI Asia Pacific Index gained 0.9 percent to 88.56 as of 11:17 a.m. in Tokyo. Eight of the 10 industry groups climbed, with about two stocks advancing for each that declined.
“The stability of financial markets has been restored somewhat,” said Hideyuki Ookoshi, who helps oversee about $365 million at Chiba-Gin Asset Management Co. in Tokyo. “Investors are keeping a keen eye on government efforts to shore up banks’ capital, which is the key to the recovery of global economies.”
Japan’s Nikkei 225 Stock Average gained 3.7 percent to 8,897.87, rebounding from its worst monthly slump on record. Japan’s markets were shut yesterday for a holiday, when the MSCI Asia Pacific excluding Japan Index advanced 5.2 percent.
Tokyo Electric Power Co., Asia’s biggest utility, climbed 2.4 percent after forecasting a narrower loss, while Tokyo Gas Co. advanced 5.7 percent after predicting it will swing back into a profit. NTT DoCoMo Inc., Japan’s biggest mobile-phone carrier, added 3.4 percent in Tokyo after second-quarter profit rose.
Among stocks that fell, Nissan Motor Co. dropped 8.5 percent. Japan’s third-largest automaker cut its profit forecast 53 percent and scrapped its dividend plans.
U.S. stocks declined, with the Standard & Poor’s 500 Index dropping 0.3 percent, on the worst contraction in manufacturing since 1982 and forecasts that the sagging economy will reduce profits. Futures on the benchmark index slid 0.4 percent today.
The difference between the rate Australia’s banks charge each other for three-month loans and the overnight indexed swap rate, a measure of funding availability, fell to 53.5 basis points, the narrowest since Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15. The London interbank offered rate, or Libor, that banks charge one another for three-month loans in dollars slid 17 basis points yesterday to 2.86 percent, a 16th day of declines, according to the British Bankers’ Association.
The Markit iTraxx Australia index, a benchmark for protecting bonds against default, was quoted 10 basis points lower at 235 basis points as of 11:26 a.m. in Sydney, Citigroup Inc. data show.
Mizuho, Japan’s second-largest bank by revenue, gained 4 percent to 241,300 yen. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank, added 4.2 percent to 623 yen. Shinhan Financial, which controls South Korea’s third-biggest bank, gained 5.3 percent to 34,900 won.
Dividend yields on the Nikkei’s constituents reached 2.52 percent on Oct. 31, higher than the 1.48 percent yields on Japanese government 10-year bonds. The stock yields exceeded 2 percent on Oct. 3 for the first time since at least July 1989.
Panasonic gained 4.7 percent to 1,583 yen on its plan to buy control of Sanyo Electric. The Osaka-based maker of Panasonic electronics will make a formal acquisition proposal soon to Goldman Sachs Group Inc., Sumitomo Mitsui Banking Corp. and Daiwa Securities SMBC Co., a company official familiar with the negotiations said Nov. 1. The three banks hold preferred shares equal to 70 percent of Sanyo.
Tokyo Electric gained 2.4 percent to 2,835 yen. The power producer on Oct. 31 estimated a net loss of 220 billion yen ($2.2 billion) for the current fiscal year, compared with a 280 billion yen loss forecast in July. Tokyo Gas, Japan’s largest natural gas distributor, advanced 5.7 percent to 444 yen, after predicting a full-year profit, reversing an earlier loss forecast.
NTT climbed 3.4 percent to 160,300 yen, after reporting second-quarter profit rose 40 percent to 173.1 billion yen.
Nissan Motor, which cut its profit forecast by 52 percent, dropped 8.5 percent to 451 yen. The fixed payments Nissan Chief Executive Officer Carlos Ghosn promised to shareholders for the next three years will be reviewed, the carmaker said on Oct. 31.
Singapore Telecom, which gets more than half its profit from its overseas unit, fell 6.4 percent to S$2.35. The phone company said second-quarter earnings will be hurt by currency movements, without providing specific figures.
Hynix Semiconductor Inc., the world’s second-largest computer-memory maker, tumbled 5.5 percent in Seoul after Moody’s Investors Service cut its debt rating one level to Ba3, citing the company’s weaker credit profile and earnings. Goldman, Sachs & Co. cut its price estimate by 29 percent.