By Masaki Kondo
Nov. 19 (Bloomberg) -- Most Japanese stocks rose as investors seized on companies trading near the lowest valuations on record. Mitsubishi UFJ Financial Group Inc. led banks lower after saying a surge in bad loans dragged down profits.
Softbank Corp., a mobile carrier that's lost half its value this year, jumped 2.4 percent. Isuzu Motors Ltd., whose dividend yield is more than twice as high as that on government bonds, climbed 2 percent. Mitsubishi UFJ, Japan's biggest listed bank, sank 3.7 percent after posting a 61 percent drop in quarterly profit and announcing a share sale to boost capital.
The Topix index rose 1.67, or 0.2 percent, to 837.11 as of 9:12 a.m. in Tokyo, with two stocks gaining for each that fell. The Nikkei 225 Stock Average declined 11.06, or 0.1 percent, to 8,317.35. In New York, the Standard & Poor's 500 Index erased losses in the last hour of trading, closing 1 percent higher.
``The recent decline has made stocks cheap,'' Hiroichi Nishi, an equities manager at Tokyo-based Nikko Cordial Securities Inc., said in an interview with Bloomberg Television. ``Shares with a low price-book ratio will likely attract investors.''
Dividends paid by companies included in the Nikkei were 2.5 percent of the benchmark's price as of Nov. 17, compared with a 1.48 percent yield on 10-year government notes, data compiled by Bloomberg show. The Nikkei's dividend yield climbed to 2.97 percent on Oct. 27, the highest since at least July 1989.
Mitsubishi UFJ yesterday reported a 61 percent drop in net income for the three months to Sept. 30, on mounting losses on stockholdings and rising costs to get rid of bad loans. The bank said it will raise as much as 546 billion yen ($5.64 billion) through a share sale, joining competitors in bolstering capital.
Nikkei futures expiring in December dipped 0.1 percent to 8,310 in Osaka and gained 0.2 percent to 8,310 in Singapore.
To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.
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