Japanese Stocks Fall on Nomura Share Plan, Asahi Glass Forecast

By Masaki Kondo

Feb. 9 (Bloomberg) -- Japanese stocks fell as Nomura Holdings Inc.’s plan to bolster capital sparked concern ownership will be diluted and Asahi Glass Co. forecast a loss this year.

Nomura, Japan’s No. 1 brokerage, plunged the most in at least 34 years after saying it may sell common stock. Rival Daiwa Securities Group Inc. lost 3.6 percent as Moody’s Investors Service said it may lower the company’s credit rating. Asahi Glass, Asia’s biggest maker of the material, sank 10 percent after predicting its first loss in seven years. Toyota Motor Corp. jumped 3.2 percent after Credit Suisse Group AG said the carmaker’s earnings will bottom out this quarter.

The Nikkei 225 Stock Average fell 107.59, or 1.3 percent, to close at 7,969.03 in Tokyo, reversing from an early 2.2 percent jump. The broader Topix index slid 11.94, or 1.5 percent, to 778.90, with almost five stocks falling for each that rose.

“Unlike preferred shares, selling common stock will have a direct dilution effect, and it’s very calamitous for existing shareholders,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees about $6.1 billion. Automakers “have been sold because of earnings concern, but these shares will eventually rebound. Investors seeking long- term returns don’t want to miss out on this chance to buy them.”

The value of stocks traded on the Tokyo bourse’s main board fell to the lowest level in a week and one-third lower than the 12-month average.

Financial companies globally have posted more than $1 trillion in credit losses and writedowns since the collapse of the U.S. mortgage market. The Nikkei fell by a record 42 percent last year and about two-thirds of the benchmark’s members trade at below their net worth, according to Bloomberg data.

Common Stock

Nomura may sell common stock valued at as much as 300 billion yen ($3.29 billion) from Feb. 19 to replenish capital, the company said on Feb. 6 after markets shut. Last month it posted a fourth-straight quarterly loss.

Nomura sank 14 percent to 490 yen, the sharpest plunge since at least September 1974, the limit of Bloomberg pricing data. Closest competitor Daiwa Securities Group Inc. lost 3.6 percent to 433 yen after Moody’s said it may lower the brokerage’s credit rating because of the “persistently negative operating environment.” A gauge of brokerages fell the most among the Topix’s 33 industry groups.

Asahi Glass plummeted 10 percent to 466 yen. The company said on Feb. 6 it expects a net loss of 42 billion yen this year as a full-scale recovery in the global economy isn’t likely. That would mark its first loss since the year ending March 2002.

Machine Orders

Toyota, the world’s biggest automaker, jumped 3.2 percent to 3,190 yen, making it the most actively traded stock by value in Tokyo, followed by Nomura. Its earnings will bottom out in the fourth quarter and will gradually improve thereafter, Koji Endo, a Tokyo-based analyst for Credit Suisse, wrote in a report dated on Feb. 6. He raised Toyota to “neutral” from “underperform.”

Fanuc Ltd., the No. 1 maker of industrial robots globally, jumped 4 percent to 6,220 yen after Nomura Securities Co. raised its rating on the stock to “buy.”Komatsu Ltd., the world’s No. 2 maker of earthmoving equipment, added 2.6 percent to 1,058 yen, and Hitachi Construction Machinery Co., the world’s top manufacturer of giant excavators, gained 3.3 percent to 1,111 yen.

Orders for Japanese machinery fell 1.7 percent in December from November, the Cabinet Office said today before markets opened. Economists had estimated an 8.6 percent tumble.

Nikkei futures expiring in March added 0.5 percent to 8,100 in Osaka and gained 0.3 percent to 8,095 in Singapore.

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