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Japan Hot Stocks-Resona, Sumitomo Metal Mining, Daihatsu

Reuters - Friday, November 21

TOKYO, Nov 21 - The benchmark Nikkei average <.N225> rose 2.5 percent and the broader TOPIX <.TOPX> was 2.1 percent higher as of 0550 GMT on Friday.

The following stocks were on the move: **RESONA <8308.T> UP, AIMS TO REPAY 163 BLN GOVT FUNDS**

Shares of Resona Holdings jumped 10.6 percent to 121,700 yen after the bank's chairman told domestic newspapers it aims to repay 163 billion yen of public funds by April, thereby avoiding potential share dilution.

Resona, Japan's fourth-largest bank, still owes the government about 2.3 trillion yen following a public bailout. Chairman Eiji Hosoya told the Yomiuri newspaper on Friday that he aims to buy back 163 billion yen worth of preferred shares from the government by April, when they are due to convert to common stocks.

Separately, Hosoya told the Nikkei newspaper that he wanted to "remove dilution concerns" through share buybacks and repayment of public funds. 0550 GMT **SUMITOMO METAL MINING <5713.T> JUMPS ON SHARE BUYBACK**

Sumitomo Metal Mining Co Ltd jumped 14.8 percent to 690 yen after Japan's largest nickel producer said it would buy back up to 10 billion yen worth of its own shares, or 2.8 percent of the outstanding shares, between Nov 21 and Dec 19. 0410 GMT **DAIHATSU MOTOR DOWN, MERRILL INITIATES AT 'UNDERPERFORM'**

Daihatsu Motor Co <7262.T> fell 3.9 percent to 740 yen as Merrill Lynch initiated coverage with an "underperform" rating and a price target of 700 yen, saying 2008/09 results could fall short of consensus estimates and management's forecasts.

"In addition to the strong yen and weak Asian currencies, domestic sales of minicars and Indonesian sales of autos, which had been strong up until October, have weakened in November," analyst Koichi Sugimoto wrote in a note to clients. 0401 GMT **SHIN-ETSU CHEM <4063.T> DOWN AFTER BROKERAGE STARTS COVERAGE**

Shin-Etsu Chemical Co Ltd, the world's biggest maker of the silicon wafers used to make chips and a major producer of polyvinyl chloride, slipped 5.1 percent to 3,710 yen after Macquarie Research initiated coverage with an "underperform" rating.

Predicting that falling prices for silicon wafers and polyvinyl chloride, a resin used in pipes, wires and other construction material, will hit the company's earnings at the end of the current business year, Macquarie added in a note to clients that with the chip sector heading sharply downward, the business climate for silicon wafers will worsen. 0229 GMT **HONEYS <2792.T> JUMPS, MERRILL UPGRADES TO 'BUY'**

Shares of Honeys Co Ltd jumped 8.3 percent to 916 yen after Merrill Lynch raised its rating on the clothing retailer to "buy" from "underperform", saying its stock has been oversold and its business should do relatively well as the economy slows.

"We don't think the company's business model has collapsed as the market believes," Merrill Lynch said in a note to clients obtained by Reuters.

"Honeys is price competitive, consumers are shifting to lower price goods and we believe Honeys should increase its market share." 0132 GMT **ORIX <8591.T> TUMBLES AFTER BOND ISSUE, TARGET PRICE CUTS**

Shares in leasing and financial services company Orix tumbled 14.5 percent to 5,290 yen after the firm said on Thursday it would issue 150 billion yen worth of convertible bonds, aiming to pay down short-term debt and raise funds for investments. [ID:nT334044] Following this, several brokerages cut their target price on the company though their ratings remained unchanged.

Goldman Sachs maintained their Neutral rating on the firm but said they were cutting their estimates and slashing their target price from 16,700 yen to 7,600 yen.

"We think the shares have mostly priced in dilution on media reports. However, dilution may increase if the shares decline in advance of the conversion price decision dates," analyst Takehito Yamanaka wrote.

J.P Morgan cut its price target on Orix from 14,500 yen to 11,700 yen. 0104 GMT **DAIICHI SANKYO <4568.T> SLIPS ON REPORT OF POSSIBLE NET LOSS**

Daiichi Sankyo Co tumbled 6.3 percent to 1,630 yen after the Nikkei business daily reported the pharmaceutical maker could post its first net loss in the year to March because of a 70 percent plunge in the share price of India's Ranbaxy Laboratories <RANB.BO>, in which it recently acquired a 63.9 percent stake.

The paper said Daiichi Sankyo may have to book an appraisal loss of around 300 billion yen after Ranbaxy shares fell to less than a third of the 737 rupees per share Daiichi paid, amid a scandal in the United States and a stock market meltdown. 0017 GMT (For IPO news, data and diary, click <JP/IPOMENU>, for stocks click [.T])

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