tokyo-based

Video: KBW”s Threadgold Sees Value in Tokio Marine, NKSJ, T&D

by on May 27, 2011

May 27 (Bloomberg) — David Threadgold, a Tokyo-based analyst at Keefe Bruyette & Woods Inc., talks about the impact of Japan’s March 11 earthquake on insurers. Japan’s four largest life insurers, including Nippon Life Insurance Co., reported a 10.5 percent drop in combined full-year profit on claims following the quake. Threadgold speaks with Rishaad Salamat on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

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Video: KBW”s Threadgold Sees Value in Tokio Marine, NKSJ, T&D

Video: Koll Says Ichiro Ozawa Would Be Good for Japan Economy: Video

by on September 13, 2010

Sept. 14 (Bloomberg) — Jesper Koll, Tokyo-based head of equity research at JPMorgan Chase & Co., discusses Japanese politics. Japan’s ruling party will determine today whether Prime Minister Naoto Kan stays in office or is replaced by Ichiro Ozawa, whose call to boost spending to spur economic growth has roiled the bond market. Koll speaks with Mike Firn on Bloomberg Television. (Source: Bloomberg)

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Video: Koll Says Ichiro Ozawa Would Be Good for Japan Economy: Video

Video: Freeze Says Yen Intervention by Government Is Not Needed: Video

September 9, 2010

Sept. 10 (Bloomberg) — Curtis Freeze, chief executive officer of Gro-Bels Co., a Tokyo-based property developer, and chairman of Honolulu-based Prospect Asset Management Inc., talks about Japan’s economy and the yen. Japan’s economy slowed less than initially estimated in the second quarter as companies boosted capital spending, indicating the nation’s recovery was intact before a surge in the yen threatened to stunt export gains. Freeze talks with Linzie Janis from Tokyo on Bloomberg Television’s “Global Connection.” (Source: Bloomberg)

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Aiful, Japanese Consumer Lenders Face Industry Shakeout as Law Caps Rates

June 17, 2010

By Finbarr Flynn and Takako Taniguchi June 18 (Bloomberg) — Japan’s consumer finance companies face multibillion-dollar losses and an industry shakeout as stricter loan rules that take effect today force them to slow lending, analysts said. Aiful Corp. , Promise Co., Takefuji Corp. and Acom Co., the country’s top four consumer lenders, face losses of 503 billion yen ($5.5 billion) over the next two years, according to estimates from Nomura Holdings Inc. The law caps interest rates at 20 percent and prohibits lending to borrowers with consumer debt equal to a third or more of their annual income. More than 60 percent of Japan’s 3,900 registered lenders are yet to comply with a rule requiring them to sign up with credit information firms , meaning they can’t make new loans. The caps, meant to protect borrowers, mark the final phase of a four-year crackdown on the industry that’s contributed to the closure of thousands of consumer lenders, choking off credit in Asia’s largest economy. “The number of consumer lenders could easily halve,” said Shiro Yoshioka , a Tokyo-based analyst at Japaninvest KK, an independent research firm. “Borrowers with nowhere else to go will end up filing for bankruptcy.” About 1,530 lenders had registered with credit data collectors Japan Credit Information Reference Center Corp. and Credit Information Center Corp. as of June 1, according to the two companies. Ratings Cuts Japan’s parliament passed the consumer credit law in December 2006 following a Supreme Court ruling that lenders had charged excessive interest rates, and gave the companies until today to adapt to the stricter rules. Almost three-quarters of consumer loans carried interest of more than 20 percent in the year ended March 2006, according to Japan’s Financial Services Agency. The crackdown led to a surge in customer claims for interest refunds, triggering billions of dollars in industry losses and a slump in consumer lenders’ shares. Moody’s Investors Service and Standard & Poor’s have cut credit ratings of Takefuji and Aiful to below investment grade, or junk. Aiful , Japan’s fourth-biggest consumer lender by market capitalization, has tumbled 96 percent in Tokyo trading since Dec. 31, 2006, and the company reported 675 billion yen of losses over the past four fiscal years. The Kyoto-based company skirted bankruptcy in December after 65 creditors agreed to delay repayments on 279.1 billion yen in debt. Model Not ‘Viable’ Shares in Tokyo-based Takefuji lost 94 percent during the period. Takefuji, which has the lowest credit rating from Moody’s among the four biggest consumer lenders, has approved less than 10 percent of loan applications since November and is selling assets to repay debt, according to the company. “Things will only continue to get worse because of the new regulations,” according to Ehsan Syed , a Tokyo-based analyst with Fitch Ratings Ltd. “The business model isn’t viable anymore.” Takefuji is taking “all possible measures to survive,” President Akira Kiyokawa said at a press conference in May. Promise President Ken Kubo last month said this fiscal year will be the company’s “severest,” adding a loss of “several tens of billions of yen” is likely unavoidable. Acom President Shigeyoshi Kinoshita , while forecasting a 26.2 billion yen profit this fiscal year, said May 13, “It’s difficult to predict what effect the loan cap will have on borrowers’ behavior.” Loan Declines The companies’ customers typically take out loans to cover living expenses, with refinancing existing debt cited as the second-most common reason, according to a survey conducted by the Japan Financial Services Association in December. Fifty-three percent of individuals who borrow from the lenders have annual incomes of 3 million yen or less, the survey showed. Half of those borrowers may be unable to get additional loans from consumer finance companies because of the cap that limits debt to a third of annual income, the lobbying group said. Aiful president Yoshitaka Fukuda said May 12 he expects demand for funding from individuals and business operators to continue, though the company may be unable to lend to about half of its existing borrowers. Lawsuits claiming overcharged interest have saddled the industry with more than 4.4 trillion yen in refund charges, according to the association, forcing lenders to close branches and eliminate workers to survive. Costs related to interest refunds will likely total 1.6 trillion yen for Aiful, Takefuji, Acom and Promise over the next five years, Nomura analyst Wataru Ohtsuka said in a May 19 report. Lenders backed by large banking groups such as Promise — 21 percent owned by Sumitomo Mitsui Financial Group Inc. — and Acom, a unit of Mitsubishi UFJ Financial Group Inc. , have better prospects of weathering new regulations as they benefit from funding and loan guarantees, said Syed. “Without the backing of a large bank, it’s going to be difficult to stay competitive and profitable,” he said. To contact the reporters on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net ; Takako Taniguchi in Tokyo at ttaniguchi4@bloomberg.net

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Video: Honda to Raise Pay for Striking Workers at China Factory: Video

May 31, 2010

June 1 (Bloomberg) — Bloomberg’s Mike Firn reports on Honda Motor Co.’s decision to raise workers’ monthly wages after a parts factory strike shut down almost all Chinese production. The workers will receive a 24 percent pay increase to 1,910 yuan ($280 dollars) per month, the Tokyo-based company said in a faxed statement today. Most workers have accepted the offer, while talks continue with those who are unsatisfied, Honda said. Bloomberg’s Susan Li also speaks. (Source: Bloomberg)

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Video: Honda to Raise Pay for Striking Workers at China Factory: Video

May 31, 2010

June 1 (Bloomberg) — Bloomberg’s Mike Firn reports on Honda Motor Co.’s decision to raise workers’ monthly wages after a parts factory strike shut down almost all Chinese production. The workers will receive a 24 percent pay increase to 1,910 yuan ($280 dollars) per month, the Tokyo-based company said in a faxed statement today. Most workers have accepted the offer, while talks continue with those who are unsatisfied, Honda said. Bloomberg’s Susan Li also speaks. (Source: Bloomberg)

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Japan Government-Backed Fund Eyes Investing in Auto, Technology Companies

February 12, 2010

By Mariko Yasu Feb. 12 (Bloomberg) — Innovation Network Corporation of Japan , the government-backed investment fund started in July, is looking at the nation’s automotive industry and technology companies for its first investment, an executive said. More than 200 companies including Toshiba Corp. and Alps Electric Co. have sought investment from the fund and some negotiations are close to a conclusion, Haruyasu Asakura, chief operating officer of the Tokyo-based fund, said in a Feb. 10 interview. “We plan to prioritize products or technologies that have global competitiveness and a bigger impact on Japanese enterprise.” INCJ has almost 900 billion yen ($10 billion) of financial support from the government and 19 private corporations including Panasonic Corp. and Toshiba, according to the fund’s statements . It aims to spur growth of Japan’s economy by promoting consolidation and nurturing new businesses, according to the fund’s Web site. “The expertise of carmakers, electronics makers and companies that are supporting them, such as manufacturers of measuring instruments, are important,” the 48 year-old former Carlyle Group managing director said. The fund is also looking at companies that can expand in the water-infrastructure business, renewable energy devices and smart-grid systems, Asakura said. INCJ, which has hired about 40 employees so far, will likely make its first investment this year, he said, In November, the fund partnered with Toshiba, Japan’s biggest chipmaker, to offer for the power-grid unit of Areva SA , the world’s largest builder of nuclear reactors. Areva said Nov. 30 it awarded exclusive negotiating rights to Alstom SA and Schneider Electric SA, which bid 4.09 billion euros ($5.6 billion) for the business. Alps, a Tokyo-based auto electronics maker, agreed with INCJ to jointly investigate the commercial viability of components that can improve the power efficiency of electronic products, the company said Dec. 1. To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net .

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Barclays Japan’s Investment Banking Co-Head Hideaki Sunaga Said to Leave

February 9, 2010

By Takahiko Hyuga Feb. 10 (Bloomberg) — Barclay Plc ’s co-head of investment banking in Japan, Hideaki Sunaga , is leaving the company, two people with knowledge of the matter said. It isn’t clear exactly when Sunaga, a former head of European investment banking at Nomura Holdings Inc. , will leave Barclays, said one of the people, who declined to be identified as no public announcement has been made. Sunaga joined Barclays in January 2009 as a managing director, and was in charge of corporate finance and merger advisory in Japan, according to a Jan. 9, 2009 statement from the company. He wasn’t reachable for comment. Mariko Hayashibara , a Tokyo-based spokeswoman at Barclays, declined to comment. To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

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Video: Google Asks China Search Engine to Stop Using Its Logo: Video

February 8, 2010

Feb. 9 (Bloomberg) — Bloomberg’s Stephen Engle reports on Goojje.com, a search engine operator in China which Google Inc. says is using its logo without authorization. A letter has been sent to the operator of the Goojje.com Web site asking for the practice to be stopped, a Tokyo-based spokeswoman for Google said in an e-mail yesterday. Google’s move comes as it holds talks with Chinese authorities on its plan to offer uncensored search results after saying it was the target of cyber attacks originating from the country. (Source: Bloomberg)

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Sumitomo Mitsui Rises in Tokyo as Stronger Capital Trumps Dilution Concern

January 20, 2010

By Finbarr Flynn Jan. 21 (Bloomberg) — Sumitomo Mitsui Financial Group Inc. , Japan’s second-largest bank by market value, rose in Tokyo trading as investors bet stronger capital from its sale of common stock will outweigh the negative impact of share dilution. Sumitomo Mitsui shares rose 1 percent to 2,918 yen at 10:03 a.m. in Tokyo, extending their gain to 10 percent this month after a 30 percent slump in 2009. The Tokyo-based lender will sell as many as 360 million shares at a 3 percent discount to yesterday’s closing price. “We were worried about dilution but now we know it, and we can move on,” said Kristine Li , a Singapore-based credit analyst at Royal Bank of Scotland Plc. “The big concern for Japanese banks has been their weak capital base.” The bank will raise as much as 968 billion yen ($10.6 billion), based on the sale price of 2,804 yen per share announced yesterday, taking share sales by Japan’s three-largest banks to 3.8 trillion yen since December 2008. Sumitomo Mitsui’s core Tier 1 capital ratio, an indicator of a bank’s ability to absorb losses, should rise to about 6.5 percent, after deducting hybrid securities and tax assets from capital, said Ismael Pili , a Tokyo-based analyst at Macquarie Group Ltd. Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank by market value, has a core Tier 1 capital ratio is 7.3 percent and third-ranked Mizuho Financial Group Inc. ’s ratio is 3.5 percent, Pili said. Sumitomo Mitsui , which raised 861 billion yen in an equity offering in June and July, is tapping investors a second time in less than a year after the Zurich-based Basel Committee on Banking Supervision said last month banks must increase the amount of equity they hold to cope with losses better. Banks should increase the quality of the capital they hold by the end of 2012, the committee said in a report. The group won’t make final decisions until the end of 2010, as to how much and what kind of capital banks should hold, the report said. To contact the reporter on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net

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Stringer Sees 3D as Sony’s Next $10 Billion Business; Investors Skeptical

November 19, 2009

By Mariko Yasu and Maki Shiraki Nov. 20 (Bloomberg) — Sony Corp. Chairman Howard Stringer forecast 3D movies, pictures and games will be the electronics maker’s next $10 billion business, challenging investors and analysts who say the technology isn’t ready to become mainstream. The maker of Bravia televisions and PlayStation 3 game consoles said yesterday 3D-related products, excluding content, will generate more than 1 trillion yen ($11 billion) in the 12 months ending March 2013. The Tokyo-based company will begin offering TVs, Blu-ray players and game consoles that adopt the technology starting next fiscal year, it said. Stringer’s bet that 3D will spread from the movie theater to the living room highlights part of his strategy to revive a company that’s forecasting its first back-to-back annual losses in half a century. The move may signal a shift in focus as the Welsh-born executive nears his target of cutting 330 billion yen in costs by eliminating 20,000 jobs and shutting 10 factories. “I doubt 3D will become a hit,” said Naoki Fujiwara , who helps oversee $4 billion as chief fund manager at Shinkin Asset Management Co. in Tokyo. “Investors want to see how the company will make money.” Sony shares have gained 29 percent this year, more than triple the benchmark Nikkei 225 Stock Average’s gain, as cost reductions led the company last month to narrow its annual loss forecast by 21 percent. The stock fell 2.2 percent to close at 2,470 yen on the Tokyo Stock Exchange yesterday. E-Book Readers, Car Batteries Stringer also plans to drive sales growth by offering electronic-book readers and connecting products through networked services, a business Sony projects will generate 300 billion yen in the year ending March 2013. The company plans to invest 100 billion yen to research and develop electric-car batteries, Hiroshi Yoshioka , head of the Consumer Products and Devices division, said yesterday. Sony is not alone in pushing 3D. Osaka, Japan-based Panasonic Corp. and Tokyo-based Toshiba Corp. also aim to introduce 3D TVs by as early as next year as Japanese electronics makers seek to compete against South Korea’s Samsung Electronics Co. and LG Electronics Inc. Kyung-Soo Ahn, the executive vice president in charge of Sony’s business products unit, said this week sales of projectors , cameras and other equipment capable of producing 3D images are expanding faster than expected. The company has received orders for more than 10,000 3D projectors as movie- theater companies such as Regal Entertainment Group and AMC Entertainment Holdings Inc. adopt the technology, Ahn said. ‘End-to-End Filming’ Stringer , 67, said Sony’s reach in the entertainment industry puts the company in position to lead the 3D market. The company’s movie unit, producer of “2012” and “ Michael Jackson’s This Is It,” is Hollywood’s third-largest studio, generating $1.3 billion in ticket sales this year through Nov. 15, according to researcher Box Office Mojo. “Sony is the only company with end-to-end filming production, 3D conversion, home delivery and home display of 3D content,” Stringer said in briefing in Tokyo yesterday. “This is another example of how the breadth of Sony’s operations give us a significant advantage versus the competition.” While Sony hasn’t disclosed prices of its 3D TV models, Fumiyuki Nakanishi , a strategist at Tokyo-based SMBC Friend Securities Co., said such sets will probably be too expensive initially to attract a mass audience. ‘Bold Statement’ “These 3D products will no doubt be pricier and it will take years for them to penetrate the market,” said Fumiyuki. “Sony often makes bold statements to shore up its share price and I see its 3D plan as being one of those announcements.” Not all analysts are skeptical. Because its operations span from hardware to content, Sony will be able to expand 3D related products without “huge” investments, said Yoshiharu Izumi , an analyst at JPMorgan Chase & Co. in Tokyo. “It may not be so hard for the company to attain the 1- trillion-yen goal,” Izumi said. The company is projecting sales to fall for a third consecutive year as Sony seeks to weather through the global recession, which led Sony to cut jobs, shut plants, outsource production and reduce its number of suppliers. Sony yesterday pushed back its key profitability targets — a 10 percent return on equity and a 5 percent operating margin – - by two years to the 12 months ending March 2013. The company is forecasting a net loss of 95 billion yen this fiscal year after losing 98.9 billion yen the previous year. “Before dreaming about 3D, the company needs to achieve real profits,” said Masahiro Mitsui , a Tokyo-based investment analyst at Federated Advisory Services Co. “The technology requires users to wear specialty glasses and it may work with games, but not for sports and documentaries.” To contact the reporters on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net ; Maki Shiraki in Tokyo at mshiraki1@bloomberg.net .

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Nikon Earnings From Cameras Likely to Beat Forecast, Division Head Says

September 28, 2009

By Mariko Yasu and Maki Shiraki Sept. 28 (Bloomberg) — Nikon Corp., the second-biggest maker of cameras used by professionals, will probably earn more from its photography unit than the company had forecast, led by higher-than-expected exports, an executive said. Sales and profit at Nikon’s imaging operations “will probably be better than our estimate for the first half and the second half,” Makoto Kimura , president of the division, said in an interview on Sept. 25. Stronger demand in China and the accelerating recovery in U.S. and European sales are helping the company, the 61-year-old executive said. Nikon shares have underperformed Japan’s benchmark stock index since Aug. 6, after the Tokyo-based company forecast a record annual loss. Kimura’s comments support estimates by Tokyo-based Camera & Imaging Products Association , which says the digital-camera market’s drop in shipments slowed in the quarter ended June. “Pessimism among camera makers is probably fading,” Osamu Hirose , an analyst at Tokai Tokyo Securities, said by phone today. “Nikon’s volume sales of cameras will probably beat its annual projection, as new models with video functionality are selling well and more products may be introduced in the second half.” Camera Demand Nikon fell 5.4 percent to 1,595 yen as of 12.35 p.m. on the Tokyo Stock Exchange, extending its loss since Aug. 6 to 15 percent. The benchmark Nikkei 225 Stock Average, which dropped 2.6 percent today, has slid 2.5 percent in the same period. Last month, Nikon widened its annual loss forecast to 28 billion yen ($315 million) because of tumbling orders at the semiconductor-equipment business. Profit at the camera division will probably fall 13 percent to 35 billion yen as revenue declines 15 percent, Nikon said at the time. Mid- to high-end models of single-lens-reflex cameras are selling more than the company expected, Kimura said. Prices of point-and-shoot compact cameras are also not falling as much as the company had expected, he said. The value of worldwide shipments of SLR cameras fell 14 percent in the three months ended June 30, after tumbling 53 percent in the preceding quarter, according to CIPA, which tracks data of 14 camera makers including Nikon. Whether the optimism on earnings lasts will largely depend on sales during the quarter ending Dec. 31, when competition will probably intensify, Kimura said. “It’s impossible to tell how much our sales will recover until we actually see how it goes in November and December, the busiest season for us,” he said. To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net .

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Nomura Falls Most Since at Least 1974 After Announcing Record Share Sale

September 25, 2009

By Takahiko Hyuga Sept. 25 (Bloomberg) — Nomura Holdings Inc., Japan’s biggest brokerage, fell the most in more than three decades after announcing a record 511.3 billion yen ($5.6 billion) share sale to fund expansion abroad. The shares plunged 16 percent, the steepest one-day decline since at least 1974, to 573 yen at the 3 p.m. close of Tokyo Stock Exchange trading. Nomura will sell about 800 million shares, equivalent to almost 30 percent of the stock outstanding , in its largest-ever offering and the second this year. Chief Executive Officer Kenichi Watanabe must explain how his plans to expand outside Japan will compensate existing investors for diluting their holdings, Credit Suisse Group AG analyst Azuma Ohno said. “The share sale is huge and will cause dilution,” Tokyo-based Ohno said. “Nomura needs to explain how it will offset the loss by showing clearly how to boost its overseas business.” Nomura’s sale follows a March offering that raised about 270 billion yen and was the brokerage’s first sale of common stock in 20 years. It comes as world leaders meet in Pittsburgh this week to consider a proposal to force banks to strengthen their capital to better account for risk. Boosting Capital Watanabe aims to build the firm’s business in the U.S., where Nomura lost out to Barclays Plc in bidding for bankrupt Lehman Brothers Holdings Inc.’s operations. The U.S. was the only region that generated a pretax loss for Nomura in the quarter ended June 30. Nomura’s Tier 1 capital ratio was 12.7 percent as of June 30. The stock sale will raise the ratio to about 17 percent, bringing it more in line with foreign competitors like Goldman Sachs Group Inc. and Morgan Stanley “Nomura needed to boost its capital, especially as it wants to take more businesses as a primary dealer in the U.S.,” said Tatsuo Majima , a Tokyo-based analyst at Tokai Tokyo Financial Holdings Inc. “Improving capital will help its credit rating and raise confidence among corporate clients.” The Federal Reserve Bank of New York named Nomura a primary dealer in July, making it the third firm to join the network of securities firms that underwrite the government’s debt this year. Nomura has a Baa2 credit rating from Moody’s Investors Service, the second-lowest investment grade. Standard & Poor’s has assigned the company a BBB+ rating, its third- lowest level. Sale Arrangers Nomura will use the proceeds to grow in the U.S., Europe, Asia and emerging markets by hiring more people and improving client services, said Keiko Sugai , a Tokyo-based spokeswoman at the brokerage. The company hired Citigroup Inc. ’s local investment banking unit to underwrite a part of its latest share sale, Sugai said. Nomura also tapped Mizuho Securities Co. and Mitsubishi UFJ Securities Co. to help arrange the offering. It was the first time Nomura picked Nikko Citigroup Ltd. for an underwriting assignment. To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

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Nomura Hires Citigroup, Mizuho, MUFG to Underwrite $5.6 Billion Share Sale

September 24, 2009

By Takahiko Hyuga Sept. 25 (Bloomberg) — Nomura Holdings Inc., Japan’s largest brokerage, said it hired Citigroup Inc. ’s local investment banking unit to underwrite a part of its $5.6 billion share sale. Nomura also tapped Mizuho Securities Co. and Mitsubishi UFJ Securities Co. to help arrange the offering, said Keiko Sugai , a Tokyo-based spokeswoman at Nomura. It was the first time Nomura picked Nikko Citigroup Ltd. for an underwriting assignment. Nikko Citigroup’s brokerage analyst Makoto Kasai today halted coverage of Nomura, after downgrading the firm to “sell” from “hold” yesterday. The suspension is “temporary” and was made because Nikko Citigroup is working on an investment-banking deal for Nomura, said Yumiko Iuchi , a Tokyo-based spokeswoman at Nikko Citigroup. She declined to be more specific. Citigroup, based in New York, in May agreed to sell its local retail brokerage and parts of its investment banking business to Sumitomo Mitsui Financial Group Inc., and will transfer 200 investment banking employees to the Japanese bank. Nomura will sell about 800 million shares in Japan and overseas to raise about 511.3 billion yen ($5.6 billion), the brokerage said yesterday. Nomura will lead the sale, it said. To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

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Japan Airlines Said to Hire Merrill as Financial Adviser in Partner Search

September 19, 2009

By Takahiko Hyuga Sept. 19 (Bloomberg) — Japan Airlines Corp., Asia’s most indebted carrier, hired Merrill Lynch Japan Securities Co. to advise on its search for partners and investments, two people familiar with the situation said. Japan Airlines appointed Bank of America Corp. ’s Merrill Lynch to evaluate the carrier’s value and select a partner who can help replenish its capital, said the people, who asked not to be identified because they aren’t authorized to discuss the deal publicly. Overseas carriers including American Airlines , Delta Air Lines Inc. and Air France-KLM are considering investments in Japan Air, also known as JAL. Delta and American, a unit of AMR Corp., are both in talks to invest in Japan Air, Hirotaka Yamauchi, a member of the government panel formed to help restructure the airline, said on Sept. 15. “JAL can’t revitalize on its own; it needs a drastic fix with help from overseas,” said Makoto Haga , chief strategist at Tokyo-based securities firm Monex Group Inc. “Hiring an adviser means the deal has taken a step forward, which is positive for stakeholders.” American, the world’s second-largest airline, has hired an investment bank to advise it on buying a stake, two people familiar with the plan said Sept. 18. The U.S. carrier partners with Japan Air in the Oneworld alliance and might lead other members of the group in an investment in the Japanese company. Delta and Air France-KLM are partners in the rival SkyTeam alliance. Government Help Japan Air’s Tokyo-based spokeswoman Sze Hunn Yap was not available to comment. Merrill Lynch’s Tokyo-based spokesman Tsukasa Noda declined to comment. Japan Airlines may receive more government-backed loans as it seeks alliance partners, said Shizuka Kamei , the nation’s newly appointed financial minister. “It’s a big national project to rehabilitate the airline properly,” Kamei said in an interview yesterday. “We will back up JAL if the company makes all efforts for its survival.” State-owned Development Bank of Japan, which has already made 235 billion yen ($2.6 billion) in loans to the Tokyo-based carrier, could provide more funds, said Kamei, 72, named to head the ministry Sept. 16 by Japan’s new government. Development Bank and lenders including Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. provided the airline with a 100 billion yen loan in June. Government support may further encourage overseas carriers to invest in Japan Air. Previous Bailouts After three government bailouts since 2001, JAL predicts a loss of 63 billion yen this year. It may have difficulty meeting that figure as the median forecast of 12 analyst estimates compiled by Bloomberg is for an 80 billion yen loss. Japan Air’s debt rating may be downgraded from the current B+ by Standard & Poor’s, the rating company said in a statement yesterday. Japan Air, which had 47,526 employees at the end of March, plans to cut 6,800 jobs by the end of 2011, President Haruka Nishimatsu said earlier this week. The carrier’s payroll compares with 33,045 at rival All Nippon Airways Co., Asia’s second-largest carrier by sales. Globally, the airline industry may lose $11 billion this year, according to the International Air Transport Association. JAL had a 25 percent drop in overseas passengers in June, the biggest decline since outbreaks of severe acute respiratory syndrome and bird flu in 2003. To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

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Asian Insurance Stocks Rise on Earnings; Mining Companies Fall on Metals

August 10, 2009

By Shani Raja and Masaki Kondo Aug. 11 (Bloomberg) — Asian insurance stocks advanced after Aioi Insurance Co. and Mitsui Sumitomo Insurance Group Holdings Inc. reported higher profits. Mining companies fell after metal prices declined. Aioi rose 3.5 percent and Mitsui Sumitomo rose 2 percent in Tokyo even after a magnitude-6.5 earthquake injured more than 40 people. Nippon Sheet Glass Co. surged 8.6 percent after Merrill Lynch & Co. recommended investors buy the stock. Rio Tinto Group , the world’s No. 3 mining company, sank 2.3 percent in Sydney. The MSCI Asia Pacific Index was little changed at 111.80 as of 11:48 a.m. in Tokyo. The gauge rose 58 percent from a five- year low on March 9 on speculation of a global economic recovery. Stocks in the measure are valued at an average 24 times estimated profit, higher than the MSCI World Index ’s 17 times. “Insurers tend to move in step with the market because a gain in equities boosts the value of their stockholdings,” said Yoshinori Nagano , a senior strategist at Tokyo-based Daiwa Asset Management Co., which oversees the equivalent of $89 billion. “There is concern current stock prices don’t match the fundamentals of the economy and earnings.” Japan’s Nikkei 225 Stock Average added 0.2 percent, while Hong Kong’s Hang Seng Index dropped 0.7 percent. Australia’s S&P/ASX 200 Index fell 0.1 percent. The Taiex Index sank 0.5 percent in Taiwan, where as many as 500 people are feared dead after a typhoon caused a mudslide. Futures on the Standard & Poor’s 500 Index lost 0.2 percent. U.S. stocks fell yesterday, led by commodity producers and retailers, after four straight weeks of gains left the S&P 500 trading at the highest level relative to earnings since 2004. The U.S. gauge declined 0.3 percent yesterday. Insurance Earnings Aioi added 3.5 percent to 474 yen. Mitsui Sumitomo rose 2 percent to 2,615 yen. Aioi said net income more than quadrupled in the three months to June 30, while Mitsui Sumitomo’s first- quarter earnings increased 37 percent. A third of the 443 companies in the MSCI Asia Pacific Index that have reported quarterly results so far have beaten analysts’ profit estimates , while 16 percent have missed, according to data compiled by Bloomberg. Mitsui Sumitomo Insurance said it’s considering its response to today’s earthquake, including creating a task force to gather information and analyze damage. The earthquake hit 23 kilometers (14 miles) below the seabed 170 kilometers from Tokyo at 5:07 a.m. local time, shaking buildings in the capital, the Japan Meteorological Agency said on its Web site. Quake-Related Shares P.S. Mitsubishi Construction Co. , which constructs disaster prevention facilities, climbed 5.6 percent to 413 yen. Fudo Tetra Corp. , which performs ground improvement works, rallied 5.1 percent to 82 yen. “Speculators are buying earthquake-related shares for quick returns,” said Masayoshi Yano , a senior market analyst at Tokyo-based Meiwa Securities Co. “The tremor doesn’t have an impact on those companies’ fundamentals and I don’t think their gains will last long.” Nippon Sheet Glass surged 8.6 percent to 353 yen, leading gains in shares on the Nikkei. Bank of America Corp.’s Merrill Lynch set its price estimate on the stock at 355 yen, saying price increases in Europe will contribute to earnings. Rio Tinto sank 2.3 percent to A$57.22. BHP Billiton Ltd. , the world’s biggest mining company and Australia’s largest oil company, lost 1.5 percent to A$37.20. An index of six metals on the London Metal Exchange fell 0.7 percent yesterday. Crude oil retreated for a third session in New York yesterday with a 0.5 percent decline, capping its longest stretch of declines since the three days ended July 14. Oil added 0.2 percent today. Best Performers Mining and energy companies are the best performing of the MSCI Asia Pacific Index’s ten industry groups in the past month on speculation demand for commodities will pick up as the global recovery takes hold. Better-than-expected earnings and economic reports worldwide have driven stocks higher since March, lifting the average valuation of the MSCI Asia Pacific’s companies to a four-month high of 25 times estimated profit on July 28. “We’ve gone up too fast and need to slow down,” said Fumiyuki Nakanishi , a strategist at Tokyo-based SMBC Friend Securities Co. “Technical indicators show the market is overheating.” To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net ; Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Mitsubishi UFJ Returns to Profit as Japanese Banks Report Improved Results

July 31, 2009

By Finbarr Flynn July 31 (Bloomberg) — Mitsubishi UFJ Financial Group Inc. , Japan’s biggest bank by market value, posted its first profit in three quarters on earnings from loans and a share market rally that boosted the value of stock holdings. Net income rose to 75.9 billion yen ($797 million) for the three months ended June 30 from 51.2 billion yen a year earlier, the Tokyo-based bank said in a statement today

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Mitsubishi UFJ Returns to Profit as Japanese Banks Report Improved Results

July 31, 2009

By Finbarr Flynn July 31 (Bloomberg) — Mitsubishi UFJ Financial Group Inc. , Japan’s biggest bank by market value, posted its first profit in three quarters on earnings from loans and a share market rally that boosted the value of stock holdings. Net income rose to 75.9 billion yen ($797 million) for the three months ended June 30 from 51.2 billion yen a year earlier, the Tokyo-based bank said in a statement today. Mitsubishi UFJ benefited from a 23 percent gain in Japan’s Nikkei 225 Stock Average in the quarter after recording a 409 billion yen loss on its shareholdings last fiscal year.

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