Monday, March 22, 2010

Bloomberg Japanese Stocks Fluctuate on Profit Outlook, Property Concern


Japanese Stocks Fluctuate on Profit Outlook, Property Concern

March 22, 2010, 11:53 PM EDT

By Masaki Kondo

March 23 (Bloomberg) -- Japanese stocks fluctuated as speculation corporate earnings will rise boosted Toshiba Corp., while real-estate companies fell after a report last week showed land prices dropped to the lowest in more than a generation.

Toshiba gained 3.8 percent after the Nikkei newspaper said the company will team up with Bill Gates’s TerraPower to develop a nuclear reactor. Hamamatsu Photonics K.K., an electronics maker that gets 64 percent of its sales abroad, surged 7.1 percent after doubling its earnings forecast. Mitsui Fudosan Co., Japan’s biggest property developer, lost 2.7 percent as real- estate companies declined for the third day.

The Topix index was little changed at 948.15 as of 12:44 p.m. in Tokyo, with about as many shares gaining as falling. The Nikkei 225 Stock Average lost 0.4 percent to 10,777.07.

“Everybody in the market is thinking earnings momentum will be strong for exporters next year,” said Hideo Arimura, a senior fund manager at Mizuho Asset Management Co., which oversees the equivalent of $36 billion in Tokyo. “I’m not inclined to be overweight on Japanese real-estate stocks because of their lack of growth prospects.”

The Topix has risen 7.6 percent from a two-month low on Feb. 9 as expectations for profit growth outweighed concern that governments and central banks worldwide will tighten stimulus measures. Analysts estimate companies in the Topix will increase earnings per share by 69 percent in the year beginning April 1.

Interest Rates

India’s central bank unexpectedly raised its benchmark interest rate on March 19, a month earlier than the next scheduled review, to tame the fastest inflation in more than a year. Policy makers in Australia and Malaysia have also boosted rates since the end of February, and China has ordered lenders to set aside more funds as reserves to reduce bank loans.

Toshiba gained 3.8 percent to 467 yen and was the most- active stock by value in Japan. The Tokyo-based company and TerraPower will design a nuclear reactor capable of operating for decades without being refueled, the Nikkei newspaper reported today, without saying how it obtained the information.

Mitsubishi Heavy Industries Ltd., another maker of reactors, rose 2.8 percent. Japan Steel Works Ltd., which makes components for nuclear plants, rose 1.8 percent.

A separate Nikkei report said Toshiba and Mitsubishi Heavy are among Japanese companies that will likely win orders in India for infrastructure projects including power grids, water- treatment facilities and public-transportation systems.

Divided Views

Hamamatsu Photonics soared 7.1 percent to 2,515 yen, headed to its highest close since October 2008. The maker of electronic components more than doubled its forecast for net income in the year to Sept. 30 and said it will pay an annual dividend of 36 yen per share, 9.1 percent more than its November plan.

Bank of Japan board members were divided on their views of the economy, according to minutes of the central bank’s Feb. 17- 18 meeting released today. “Some members were of the view that upside and downside risks were becoming balanced” while others noted “considerable downside risks to the economy,” the minutes showed.

Mitsui Fudosan, Japan’s top property developer, sank 2.7 percent to 1,542 yen, and its closest rival, Mitsubishi Estate Co., retreated 2.2 percent to 1,415 yen. Real-estate companies have fallen the most among the Topix’s 33 industry groups in the past three days, and today they were the index’s heaviest drag.

Japanese commercial land prices fell 6.1 percent in 2009 to the lowest level since the government began collecting comparable data in 1974, according to a report on March 18 by the Ministry of Land, Infrastructure, Transport and Tourism.

On March 26, the statistics bureau is scheduled to release a report on the nation’s consumer prices. Prices, excluding fresh food, are estimated to have declined for a 12th month in February, according to economists.

--Editors: Nicolas Johnson, Sam Waite.

To contact the reporter for this story: Masaki Kondo in Tokyo at

To contact the editor responsible for this story: Darren Boey at

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