Japan's Stocks Gain, Led by Shippers, as Cargo Rates Soar

By Patrick Rial

Aug. 15 (Bloomberg) -- Japanese stocks advanced for the first time in four days, led by shipping companies, after freight rates soared the most in almost seven months.

Mitsui O.S.K. Lines Ltd., the nation's second-biggest bulk shipper, climbed 3.1 percent amid speculation that Chinese demand for commodities will boost transportation demand. Nikon Corp., the world's largest maker of machines that etch circuitry onto silicon wafers, reached a seven-month high after a report memory- chip maker SanDisk Corp. may be acquired.

Central Japan Railway Co. led train operators lower after Mizuho Securities Co. cut its rating on the company.

The Nikkei 225 Stock Average gained 43.82, or 0.3 percent, to 13,000.62 as of 9:39 a.m. in Tokyo. The broader Topix index advanced 3.30, or 0.3 percent, to 1,242.23.

For the week, the Nikkei has lost 1.3 percent, while the Topix has declined 1.4 percent for a third-straight loss.

Japanese companies also got a boost after Goldman Sachs Group Inc. said the U.S. dollar has bottomed, indicating exporters will generate higher profits on U.S. sales as the currency strengthens.

Mitsui O.S.K. jumped 3.1 percent to 1,327 yen, bringing this week's gain to 11 percent. Kawasaki Kisen Kaisha Ltd., the country's third-biggest shipping line, surged 3.9 percent to 801 yen. Nippon Yusen K.K., the No. 1, gained 2.4 percent to 894 yen.

The Baltic Dry Index of freight costs for commodities posted its biggest gain since Jan. 30, rising 4.6 percent, improving the outlook for shippers. The benchmark had slumped for 23 consecutive days up to Aug. 13.

SanDisk Buyout?

Nikon Corp. rose 3.8 percent to 3,600 yen, the highest since Jan. 4, while Elpida Memory Inc., Japan's largest memory chipmaker, jumped 4.9 percent to 2,780 yen.

SanDisk, the biggest maker of memory cards for digital cameras, may be acquired by Seagate Technology, the world's biggest maker of hard-disk drives, the trade journal EE Times said yesterday. The report boosted confidence profitability in the industry will be improved by ongoing consolidation.

Semiconductor-related shares also climbed after Ulvac Inc., a maker of vacuums and etching equipment used in semiconductor production, forecast profit will double next year as sales climb by a quarter. Ulvac's shares soared 10 percent to 3,400 yen.

JR Central dropped 2.7 percent to 1.083 million after Satoru Kunieda lowered the company to ``hold'' from ``buy.'' The analyst also cut target prices on East Japan Railway Co. and West Japan Railway Co., which fell 0.8 percent and 0.6 percent respectively.

DaVinci Earnings Picture

Urban Corp., the property developer that became Japan's biggest bankruptcy case in six years this week, slumped 72 percent to 9 yen. K.K. DaVinci Advisors, the manager of the nation's largest private real estate fund, dropped 13 percent to 20,150 yen after profit and sales for the first half missed forecasts as the company struggled to sell properties.

``The reduction in liquidity stems from the credit crunch,'' Masahiro Mochizuki, an analyst at Credit Suisse Group in Tokyo, wrote in a note to clients. ``There is now a strong possibility that at some companies we will see greater valuation losses than initially expected.''

Nikkei futures expiring in September added 0.4 percent to 13,000 in Osaka and gained 0.3 percent to 12,995 in Singapore.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net.