Japan's Stocks Fall as Exports Slow; Bush Speech Lifts Shinsei

By Patrick Rial
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Sept. 25 (Bloomberg) -- Japan shares fell as a drop in auto shipments dragged on export growth and Re-plus Inc.'s bankruptcy reignited credit concerns. Indexes pared losses after U.S. President George W. Bush urged lawmakers to pass a bailout package for the financial system.

Nissan Motor Co. slipped 5 percent, leading automakers lower, after data showed U.S.-bound car exports plunged as the financial crisis weighed on consumer spending. Re-plus, the latest Japanese property company to go bankrupt, was offered by its lower limit. Shinsei Bank Ltd. advanced 3 percent, helping lenders pare losses, following Bush's comments. Gauges also fell as most stocks traded without dividend rights from today.

``This is an extremely difficult time for property developers, and the sense is that we haven't seen the end of the bad news,'' said Hideyuki Ookoshi, who helps oversee about $365 million at Chiba-Gin Asset Management Co. in Tokyo. ``If the bailout doesn't pass, things will turn very grave.''

The Nikkei 225 lost 108.50, or 0.9 percent, to close at 12,006.53 in Tokyo. The broader Topix index dropped 14.02, or 1.2 percent, to 1,153.95. Both gauges lost as much as 2.3 percent before Bush's speech at 10 a.m. Tokyo time. Trading volume on the main board of the Tokyo exchange was the lowest since Sept. 1.

The 148 Nikkei-listed shares that lost the right to a dividend had a 76 point drag on the gauge, according to Bloomberg data. Over half of Topix shares traded without dividend rights.

Nissan, which generates about two-thirds of its sales outside Japan, tumbled 5 percent to 763 yen. Honda Motor Co., Japan's second biggest carmaker, sank 3.2 percent to 3,300 yen. Takeuchi Manufacturing Co., a machinery maker that exports 90 percent of its products, dropped 5.7 percent to 1,490 yen.

Exports Slow

Exports to the U.S. fell by a record 22 percent in August from a year earlier, Japan's Finance Ministry said today. Overall, exports rose 0.3 percent, while economists had forecast a 2.3 percent increase. Nissan, Honda and market leader Toyota Motor Corp. said today they cut global production last month.


Re-plus yesterday became the 11th listed property-related company to file for bankruptcy in Japan this year, with 32.6 billion yen ($307 million) in debt. The condominium builder was unable to obtain financing due to the global credit crunch, it said. The shares fell 1,000 yen to 7,170, though no trades took place because sell orders overwhelmed those to buy.

Taisei Corp., Japan's No. 2 listed construction company, reversed its projection for a full-year profit to a loss today, citing the collapse of real estate companies. Its shares slumped 1.2 percent to 259 yen, paring an earlier 8.8 percent plunge. Atrium Co., which securitizes property, sank 3 percent to 553 yen after saying it made loans to Re-plus.

``The bankruptcy of Re-plus reignites unease about the credit markets,'' Seiji Arai, a strategist at Mitsubishi UFJ Securities Co., said in an interview with Bloomberg Television.

Banks Rebound

Shinsei, the former Long Term Credit Bank of Japan, swung from a 2.4 percent slide to advance 3 percent to 305 yen. Mizuho Financial Group Inc., the nation's second-biggest listed bank, gained 1.5 percent to 463,000 yen, reversing a 2.4 percent drop.

Bush urged Congress to act on his administration's proposed $700 billion bailout plan, saying the ``entire economy is in danger.'' After the speech, House Financial Services Committee Chairman Barney Frank said House and Senate Democrats had reached a deal on legislation.

Mitsui O.S.K. Lines Ltd., the nation's second-biggest bulk shipper, declined 4.9 percent to 1,010 yen as a measure of cargo rates fell the most in three months. Kawasaki Kisen Kaisha Ltd., the third biggest, declined 3.9 percent to 722 yen. Mitsui & Co., Japan's second-largest trading company, dropped 5.6 percent to 1,498 yen after oil prices slumped for a third day.

The Baltic Dry Index, a measure of shipping costs for commodities, retreated 6.1 percent yesterday, the steepest drop since June 12. Oil prices fell as low as $105.13 today, from $130 during trading on Sept. 22.

Moritex Buyout

``The trade figures and Baltic gauge are a sign that the global economy is increasingly headed towards recession,'' said Yoshihisa Okamoto, a fund manager at Mizuho Asset Management Co., which oversees $26 billion in Tokyo. ``Cyclical stocks are not worth buying right now because even if the bailout goes through smoothly, it's not going to change the bearing we're on.''

Germany's Schott AG said yesterday it will make a tender offer for a 51 percent stake in Moritex Corp., a Japanese optical equipment maker. Schott is offering 740 yen per share, a 42 percent premium over yesterday's closing price. Moritex shares rallied 19 percent to 617 yen.

Nikkei futures expiring in December declined 0.7 percent to 12,040 in Osaka and slipped 0.3 percent to 12,035 in Singapore.

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