Japan Stocks Gain, Led by Insurers on Merger Talk; Elpida Jumps
Dec. 29 (Bloomberg) –
gained for a third day,
led by insurers, on optimism mergers will help companies survive
the global economic slowdown.
Aioi Insurance Co. soared 19 percent on reports it may
combine with two competitors to create Japan’s biggest non-life
insurer. Elpida Memory Inc., the nation’s No. 1 memory chipmaker,
rose 13 percent after saying it’s in merger talks with Taiwanese
semiconductor companies.
, Japan’s largest oil and gas
explorer, climbed 6.4 percent after Israeli air strikes in the
Gaza strip sent crude oil prices higher for a second day.
“Mergers are usually successful when the economy is in a
slump, because businesses are more eager to achieve their shared
goal: survival,” said
, chief fund manager at
Shinkin Asset Management Co., which oversees the equivalent of
$6.1 billion. “Should the situation in Israel persist, we’ve got
to be ready for a resurgence in oil prices.”
inched up 7.65, or 0.1 percent,
to close at 8,747.17, reversing an early 1.2 percent decline. The
broader
added 8.19, or 1 percent, to close at 854.77
in Tokyo, with three stocks rising for each that fell.
The Nikkei capped its third weekly gain on Dec. 26, trimming
its slide in 2008 to 43 percent, its worst annual performance
ever. Japan is mired in its first recession in six years, joining
the U.S. and Europe in their first simultaneous contractions
since World War II. Nineteen years ago today, the Nikkei reached
its all-time high of 38,915.87 at the peak of Japan’s asset and
equity bubble.
Aioi surged 19 percent to 484 yen, the sharpest advance
since Oct. 14 and the
on the MSCI World Index.
Nissay Dowa General Insurance leapt 15 percent to 578 yen, while
Mitsui Sumitomo Insurance Group Holdings Inc. climbed 8.3 percent
to 2,885 yen.
The three companies are in talks to merge, two people
familiar with the negotiations said, confirming an earlier report
by the Nikkei. The three insurers had 2.73 trillion yen ($30
billion) in combined revenue from premiums in the year ended
March 31, more than industry leader
, whose shares have lost 85 percent this year, rose 13
percent to 585 yen, the highest close since Nov. 6. The Tokyo-
based company has begun merger talks with Powerchip Semiconductor
Corp. and two other Taiwanese semiconductor companies to counter
a glut that’s widening industry losses, Chief Executive Officer
said.
On Dec. 26, Topix constituents traded at
estimated earnings for this fiscal year, nearing the 2008 high of
17.6 on May 15. The benchmark has risen 15 percent since reaching
a 24-year low on Oct. 27, outperforming a 7.6 percent gain by the
MSCI World Index.
, Japan’s No. 1 oil explorer, rose 6.4 percent to
664,000 yen, and closest rival Japan Petroleum Exploration Co.
added 4.7 percent to 3,800 yen. A gauge of mining companies
posted the second-sharpest climb among the Topix’s 33 industry
groups, following a measure tracking insurers.
Crude oil for February delivery extended its gain to a
second day, adding as much as 5.6 percent to $39.82 a barrel
today. Israel called up reservists after two days of air attacks
that killed more than 285 people in the Hamas-controlled Gaza
strip. The Middle East produces almost a third of the world’s oil.
“Israel’s attack prompted investors to sell papermakers as
their earnings will be directly hit by higher fuel costs,”
Shinkin’s Fujiwara said.
Mitsubishi Paper Mills Ltd. dived 5.4 percent to 211 yen,
leading losers on the Nikkei, while Oji Paper Co., the nation’s
largest consumer of high-sulfur fuel oil, sank 2.4 percent to 527
yen. The Nikkei newspaper reported on Dec. 27 that Oji is likely
to post about 30 billion yen ($331 million) in pretax profit for
the nine months to Dec. 31, almost unchanged from a year earlier
as demand weakened.
Nikkei futures expiring in March advanced 0.3 percent at
8,760 in Osaka and inched up 0.2 percent to 8,750 in Singapore.
.
Last Updated: December 29, 2008 02:09 EST

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