Tokyo share rally tempered by finance fall (FT.com)
31.10.2006 13:44 Finance
The broader Topix fell 0.2 per cent to 1,617.42, hit by a steep decline in banking shares, which have a particularly high weighting in the index.
The beleaguered consumer finance sector fell yet further after four companies downgraded their first-half earnings estimates because of a decision to increase reserves against legal claims by borrowers. Of the four companies, Sanyo Shinpan Finance plunged 5.9 per cent to Y4,470, Promise fell 3 per cent to Y4,230, Acom closed 2 per cent lower at Y4,500, and Aiful was down 1 per cent at Y4,040.
The banking sector fell 1.2 per cent, declining further from a mini-peak hit last week. Bank shares have struggled to make headway this year, given quite disappointing domestic economic figures and receding expectations of interest rates rises, which many analysts thought would benefit Japanese banks by increasing their loan margins.
Tokyo Tatemono, a property developer, climbed 1.9 per cent to Y1,396 after Deutsche Bank lifted its target price to Y1,500. The broker cited high occupancy rates and likely rent rises in January 2007.
Softbank, the telecoms and internet conglomerate fighting a bitter battle for share in the mobile market, fell 2.9 per cent to Y2,560. The company was hit by the news that Japan's Fair Trade Commission is discussing Softbank's controversial new pricing plans, announced last week on the eve of number portability.
Investors also responded negatively to the revelation that Softbank had a net loss of about 20,000 customers in the first five days of number portability. NTT DoCoMo (NYSE:DCM - news), which also suffered customer losses, was down 1.1 per cent to Y179,000. But KDDI, which grabbed tens of thousand of customers from its two rivals, was up only 0.3 per cent to Y729,000. KDDI had long been seen as the company most likely to gain from number portability.
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