BLBG: Japanese Stocks Advance, Led by Shipping Lines; Okuma Climbs
By Akiko Ikeda
Jan. 14 (Bloomberg) -- Japanese stocks rose, lifting the Topix index for the seventh time in eight days, as shipping lines and machine-tool makers advanced on speculation higher cargo trade and orders will boost profit.
Mitsui O.S.K. Lines Ltd., the owner of the world’s largest shipping fleet, added 6.5 percent after the Nikkei newspaper said profit increased. Okuma Corp. and JTekt Corp., whose machines make parts and equipment, rose at least 5.5 percent after machine-tool orders surged, even as a separate report showed orders fell for other machinery from phones to excavators. Mizuho Financial Group Inc. climbed 5.7 percent on speculation it will boost capital through a rights offering.
“The trend in the economy is gradually getting better,” said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “It was confirmed that demand for machine tools in emerging countries is strong.”
The Nikkei 225 Stock Average rose 1.5 percent to 10,893.73 as of 1:25 p.m. in Tokyo, on course for the highest level since October 2008. The broader Topix gained 1.3 percent to 956.57, with more than twice as many stocks advancing as declining.
The Topix had the lowest return last year among benchmark indexes in the world’s 10 largest stock markets, climbing 5.6 percent, on concern the government will be unable to revive economic growth and a stronger yen will hurt profits.
Stocks in the index trade at an average of 38 times estimated earnings, compared with 15 times for the Standard & Poor’s 50 Index in the U.S. and 13 times for the Dow Jones Stoxx 600 Index in Europe.
Machine Tools Vs. Machinery
Okuma jumped 11 percent to 567 yen, the second-steepest gain in the Nikkei 225. JTekt climbed 5.5 percent to 1,240 yen. Makino Milling Machine Co. surged 8.3 percent to 446 yen, headed for the highest level since September 2008. Amada Co., which makes metal-cutting machines, rallied 5.4 percent to 689 yen.
Machine-tool orders rose 62.8 percent in December from a year earlier, the Japan Machine Tool Builders’ Association said in a preliminary report yesterday after stock trading closed. The year-on-year change was the first gain since May 2008.
Separately, orders for broader machinery unexpectedly fell 11.3 percent in November from a month earlier, the Cabinet Office said today in Tokyo.
Shipping Lines Climb
Shipping lines rose the most among the Topix’s 33 industry groups. Mitsui O.S.K. Lines Ltd. gained 6.5 percent to 619 yen after the Nikkei newspaper said Japan’s second-largest shipping line by sales may have about 10 billion yen ($109.5 million) in pretax profit for the October-to-December period, more than 500 percent higher than the three months ended in September. Strong demand for resources in emerging countries including, China and India, contributed to the increase, according to the Nikkei.
“I can see strength of demand in emerging markets,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., which manages the equivalent of $61 billion. “We can actively invest in companies that have businesses in emerging countries. They are leading global growth.”
Nippon Yusen K.K., Japan’s biggest shipping line by sales, advanced 5.7 percent to 354 yen, and Kawasaki Kisen Kaisha Ltd., the No. 3, leapt 7.4 percent to 349 yen. The Baltic Dry Index, a measure of shipping rates for commodities, rose for a third day yesterday in London.
Banks, Japan Airlines
Banks were the second-biggest contributor to the Topix’s gain. Mizuho, Japan’s third-largest bank by market value, climbed 5.7 percent to 186 yen on speculation it will be the first company in Japan to boost capital through a rights offering, limiting the dilution for existing shareholders. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, added 2.3 percent to 490 yen and was the country’s most-traded stock.
Sumitomo Mitsui Financial Group Inc. advanced 3.2 percent to 2,896 yen after Credit Suisse Group AG lifted its rating on Japan’s second-largest publicly traded bank to “outperform” from “neutral.”
Japan Airlines Corp. swung between 10 yen and 6 yen from yesterday’s record-low close of 7 yen after Kazuo Inamori was named chief executive officer of Asia’s largest carrier to help the company turn around. The company’s main creditors agreed to support a government-led rehabilitation plan, Kyodo News Service reported today, without saying where it obtained the information.
