By Kana Nishizawa and Satoshi Kawano
Nov. 6 (Bloomberg) -- Most Japanese stocks fell, led by financial companies on concern stricter rules will force them to raise funds, diluting the value of current shareholdings, and after companies cut their profit forecasts.
T&D Holdings Inc., Japan’s biggest listed life insurer, tumbled 11 percent after it registered to sell 120 billion yen ($1.3 billion) in new shares. NTT Urban Development Corp. tumbled 7 percent after reducing its full-year net income forecast by more than half. Sony Corp., the nation’s biggest television exporter, added 1.6 percent after the U.S. reported lower-than-expected jobless claims and higher productivity.
“Regulations are expected to be tightened, so financial companies have to raise capital to maintain their size,” said Kiyoshi Ishigane, strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $56 billion in Tokyo. “An excess supply of their shares will lead to sell-offs.”
Japan’s Topix index lost 0.1 percent to 874.01 at the close in Tokyo, with more than two shares falling for each that rose. The Nikkei 225 Stock Average climbed 0.7 percent to 9,789.35. The Topix lost 2.3 percent for the week, while the Nikkei declined 2.5 percent. Stocks in the Topix are valued at 36 times estimated earnings, compared with 20 at the start of 2009.
Financial stocks dropped after T&D, Japan’s biggest listed life insurer, announced it may sell stock to repay debt. T&D shares plunged 11 percent to 2,115 yen. Sompo Japan Insurance Inc., a casualty insurer, retreated 2 percent to 544 yen. Resona Holdings Inc., Japan’s fourth-largest bank by market value, fell 1.7 percent to 1,037 yen.
Financial Companies
Leaders from the Group of 20 nations are expected to favor stricter capital requirements at a meeting today that will exclude preferred shareholdings from core capital, a move that may force Japanese banks to issue new shares, the Nikkei reported.
NTT Urban Development Corp. tumbled 7 percent to 66,600 yen. The property developer cut its full-year net income forecast by more than half, to 5 billion yen from 12 billion yen because of impairment losses on inventory assets.
Acom Co., Japan’s largest consumer-finance lender by market value, dropped 7.5 percent to 1,477 yen after forecasting a loss of 11.4 billion yen for the year ending March to pay for headcount reductions. It plans to close branches and eliminate 550 jobs.
Mitsumi Electric Co. slid 6.3 percent to 1,631 yen, after the electronic-component maker reduced its full-year net income outlook to 5.3 billion yen from 7 billion yen. The company had a 11.2 billion yen profit a year ago. Its first-half profit tumbled 63 percent to 3.51 billion.
Exporters Advance
Bridgestone Corp. fell 3.3 percent to 1,436 yen. The world’s largest tiremaker by sales expects an annual loss of 10 billion yen as a result of plant closures in Australia and New Zealand. The company had previously expected a profit of 6 billion yen for the year through Dec. 31.
In New York, the Dow Jones Industrial Average jumped 2.1 percent yesterday, the biggest gain since July. Worker productivity surged at a 9.5 percent annual rate in the third quarter, the fastest pace in six years, according to the Labor Department. Initial jobless claims dropped by 20,000 to 512,000 in the week ended Oct. 31, the fewest since January. Labor costs also fell, signaling companies may start hiring again.
“Unemployment is the biggest problem in the U.S. and we’re seeing positive signs there, which boosts exporters here,” said Mitsubishi UFJ’s Ishigane.
Sony gained 1.6 percent to 2,590 yen. Canon Inc., the world’s largest camera maker, rose 1.8 percent to 3,410 yen.
“Investors are likely to buy into exporter shares with the improvements in the U.S. economic data,” said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc.
To contact the reporter for this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net; Satoshi Kawano in Tokyo skawano1@bloomberg.net.
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