Tokyo shares outlook - Lower on bailout of collapsed Ashikaga Bank 01.12.2003 00:31 Headlines
TOKYO (AFX-ASIA) - Share prices are expected to open lower, with the
government's decision to bail out collapsed regional lender Ashikaga Bank over
the weekend likely to damage market sentiment, analysts said.
The Japanese government announced a plan Saturday to nationalize the
insolvent regional bank -- whose debt exceeded assets by 102.3 bln yen at the
end of Sept -- to help stabilize the country's financial system.
The government subsequently decided to cancel the bank's stock, which will
seriously damage parent Ashikaga Financial Group Inc's shareholders equity. The
move is far more stringent than the government's bailout of Resona Holdings Inc
in May, whereby sharesholders equity was preserved.
In the meantime, the Tokyo Stock Exchange will move Ashikaga Financial Group
Inc's shares into a special monitoring unit for companies whose capitalization
and income do not meet minimum requirements for the first and second sections of
the exchange.
Some listed companies, which hold shares in Ashikaga Financial Group Inc,
might be forced to lower their fiscal 2003 earnings estimates, now that the
government is forcibly acquiring all of the distressed banking group's stock for
free to nationalize it, the Nihon Keizai Shimbun reported.
The following companies could move based on these developments:
--Toyota Motor Corp plans to increase the production capacity at its
joint-venture factory in Tianjin, China, by 50 pct to around 80,000 units a year
as it prepares for mass production of the Corolla model there starting next
spring.
--Mitsubishi Electric Corp plans a 40 pct increase in production of red
laser diodes used to write data to DVDs.
--Honda Motor Co plans to expand its scooter business in China.
--Mitsui OSK Lines Ltd plans to order 30 cape-size bulk carriers over a
three-year period starting in 2004 at a total cost of more than 100 bln yen.
--Sony said it will separate a unit, Network Application Contents Service
Sector F Project, which is involved in the development of new services based on
mobile phones equipped with FeliCa, a new contactless IC card technology.
--Moody's Investors Service said it has assigned an "A1" rating to Kyushu
Electric Power Co Inc's Series 375, 15 bln yen, 0.35 pct bonds due 2006.
--Internet mall operator Rakuten Inc said it is considering entering the
financial services sector, including consumer loans business, confirming a
newspaper report.
--Kobe Steel Ltd said it has come to terms with Mitsubishi Materials Corp
to integrate their copper tube operations next spring, confirming an earlier
report.
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