Japan's Stocks Rise as Bankruptcy Concern Eases; Komatsu Gains

By Masaki Kondo

Aug. 18 (Bloomberg) -- Japan's stocks opened the week higher as concerns eased that tighter lending standards will drive developers to bankruptcy, and after analysts recommended manufacturer shares that have become cheap.

Japan General Estate Co. jumped the most in 10 months after rival developer Urban Corp.'s bankruptcy filing set off a 20 percent drop in two days. Komatsu Ltd., the world's second- largest earthmover maker, rose 3.8 percent after Nikko Citigroup Ltd. said its share price was a ``good investment opportunity.'' AOC Holdings Inc. surged 5.6 percent after oil prices slumped, boosting margins for the refiner.

``Real-estate stocks have been sold on concern Urban's failure would trigger the collapse of smaller developers,'' said Mitsushige Akino, who oversees the equivalent of $468 million at Ichiyoshi Investment Management Co. in Tokyo. ``Once investors calmed down, they've noticed such a scenario is unlikely.

The Nikkei 225 Stock Average climbed 146.04, or 1.1 percent, to close at 13,165.45 in Tokyo, after falling as much as 0.7 percent in early trading. The broader Topix index rose 16.44, or 1.3 percent, to 1,263.75, the sharpest jump since Aug. 11. Almost four stocks advanced for each that fell on the Topix.

Urban filed for bankruptcy protection on Aug. 13 with $2.35 billion in debt, marking Japan's biggest corporate failure this year. The company joined builders Zephyr Co. and Kyoei Sangyo Co. that went bankrupt last month as the turmoil in the U.S. mortgage market spurred financial companies to tighten their lending.

Nikkei futures expiring in September gained 1 percent to 13,160 in Osaka and added 1.2 percent to 13,160 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.