Japan Stocks Rebound, Led by Energy Producers; Toshiba Jumps

By Masaki Kondo

Jan. 14 (Bloomberg) -- Japanese stocks rebounded from the longest losing streak in two months as higher oil prices lifted energy producers and shippers advanced on increases in fees for transporting commodities.

Inpex Corp., Japan’s largest oil explorer, added 5.3 percent after crude oil rose for the first time in six days. Mitsui O.S.K. Lines Ltd. led a gain by shipping companies with a 3.6 percent climb. Toshiba Corp. and Fujitsu Ltd. jumped more than 5 percent on a plan to combine their hard-disk drive businesses. Mitsubishi Estate Co. lost 3.3 percent, extending yesterday’s 9.2 percent decline, on speculation the industry will have more failures after two real-estate companies filed for bankruptcy last week.

“Investors know company earnings and the global economy will be awful this year but are expecting the recovery will be fast once it starts,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees about $6.1 billion in Tokyo. “They are gradually shifting their funds to resources and other cyclical stocks.”

The Nikkei 225 Stock Average added 24.54, or 0.3 percent, to close at 8,438.45 in Tokyo. The broader Topix index climbed 5.27, or 0.7 percent, to 819.39, with more than three stocks rising for every two that fell. The gauges dropped for a third day yesterday, the longest losing streak since Nov. 20. The value of stocks traded in Tokyo was 36 percent lower than the six-month average.

Oil prices have tumbled by three-quarters from a record $147.27 on July 11 as demand declined in a slowing global economy. Mining shares as a group have fallen 45 percent since then, pushing down their prices to 10.6 times estimated earnings for this fiscal year, almost half the ratio of the Topix.

Crude Oil

Crude oil for February delivery broke a five-day losing streak yesterday with a 0.5 percent gain in New York as Saudi Arabian Oil Minister Ali al-Naimi said his country will make deeper production cuts than previously announced. Oil extended its gain today, rising as much as 3.9 percent.

Inpex rose 5.3 percent to 678,000 yen, while smaller rival Japan Petroleum Exploration Co. gained 3.2 percent to 4,260 yen. Mining companies were the biggest winners among 33 industry groups on the Topix.

Mitsui O.S.K., Japan’s second-biggest shipping line, added 3.6 percent to 604 yen even after saying the company will reduce its planned increase in ships amid shrinking demand. Kawasaki Kisen Kaisha Ltd. advanced 2.8 percent to 407 yen, while market leader Nippon Yusen K.K. rose 1.5 percent to 540 yen.

The Baltic Dry Index, a measure of commodity-shipping costs, climbed for a sixth day, rising 2.5 percent to the highest level since Oct. 29.

Toshiba, Fujitsu

Toshiba rose 6 percent to 408 yen and was the most actively traded stock in Tokyo. Fujitsu, the world’s sixth-largest maker of hard-disk drives, gained 5.3 percent to 415 yen. The companies are in final talks to combine their hard-disk drive businesses to reduce costs, according to four people familiar with the discussions.

Sony Corp., the world’s second-biggest maker of consumer electronics, jumped 4.5 percent to 2,090 yen, while Casio Computer Co., the maker of G-Shock digital watches, soared 8.2 percent to 697 yen, posting the steepest leap on the MSCI World Index. Goldman Sachs Group Inc. raised its price estimate on Sony by 29 percent to 2,200 yen and on Casio by the same extent to 750 yen, the brokerage’s note to clients showed today.

Mitsubishi Estate, Japan’s second-largest developer, sank 3.3 percent to 1,248 yen, and market leader Mitsui Fudosan Co. lost 3.2 percent to 1,254 yen. Real-estate companies were the biggest losers among the Topix groups.

More Failures?

Real-estate advisory company Creed Corp. and condominium builder Toshin Housing Co. separately filed for bankruptcy on Jan. 9. Tokyo Shoko Research Ltd. yesterday said bankruptcies among listed companies rose to the highest level in 2008 since World War II. Three-quarters of those failures were real estate- related, according to data compiled by Bloomberg.

“Banks still seem cautious about lending to real-estate companies and I expect more failures will occur in this sector,” Shinkin’s Fujiwara said.

Nikkei futures expiring in March were unchanged at 8,370 in Osaka and edged up 0.2 percent to 8,395 in Singapore.

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