Mizuho Plans to Sell $4.6 Billion of Shares to Repay Bailout, Person Says
Mizuho Financial Group Inc., Japan's second-biggest bank by
assets, may sell 530 billion yen ($4.6 billion) of shares to
help repay funds from a public bailout, a person familiar with
the plan said. The bank plans to offer 700,000 shares, said the
person, who asked not to be identified before an announcement
to the Tokyo Stock Exchange. The sale may be increased to as
many as 763,000 shares, or 6.4 percent of its stock
outstanding, to meet demand. The sale, Japan's largest in more
than four years, would take advantage of a 37 percent gain in
the Tokyo-based lender's market value this year. Mizuho needs
funds to repay 850 billion yen it owes the government from an
industry bailout in 1999 when rising bad loans triggered losses
at the nation's biggest banks. ``They are doing the right thing
at the right time,'' said Edwin Merner, who oversees $600
million in assets as president of Atlantis Investment Research
Corp. in Tokyo. ``Given the use of money, it is positive and
should be okay for the market.''
Japanese Stocks Fall as Mizuho Slides on Share-Sale Plan; Yoshinoya Surges
Japanese stocks fell, led Mizuho Financial Group Inc. and
other lenders. Mizuho may sell 530 billion yen ($4.6 billion)
of shares to help repay funds from a public bailout, a person
familiar with the plan said. ``There may be more share sales
like this as companies take advantage of the recent rally in
stocks,'' said Shigeharu Shiraishi, who helps oversee about $15
billion in assets as a managing director at Societe Generale
Asset Management (Japan) Co. in Tokyo. ``What this means for
the market is that it will face an oversupply of shares and
that could be a selling factor.'' The Nikkei lost 34.12, or 0.3
percent, to 13,705.70 as of 2:20 p.m. in Tokyo, retreating from
its highest since May 2001. The Topix index dropped 9.93, or
0.7 percent, to 1411.90, with Mizuho accounting for about 11
percent of the index's loss. Limiting losses, Aeon Co. led
retailers higher after reporting a record first-half operating
profit.
Dollar Drops for First Day in Four on Expectations Services Index Declined
The dollar declined against the yen for the first day in
four in Asia on speculation an industry report will show growth
at U.S. service companies slowed in September. A rally that
pushed the dollar to a 16-month high may wane on signs record
gasoline prices are hurting the world's largest economy. The
Institute for Supply Management's index of services, which make
up 67 percent of gross domestic product, probably dropped to a
four-month low. ``Recent aggressive dollar buying has come to a
halt,'' said Tetsu Aikawa, a currency sales manager in Tokyo at
UFJ Bank Ltd., a unit of Japan's largest lender by assets.
``The report due today will be used as an excuse for dollar
selling and we will see the short-term correction of the
currency.'' The dollar fell to 113.95 yen at 2:31 p.m. in
Tokyo, from 114.25 yen late yesterday in New York, according to
electronic foreign-exchange dealing system EBS. The U.S.
currency weakened to $1.1946 per euro from $1.1917. The dollar
earlier rose to as high as 114.41 yen, its strongest since May
18, 2004.
Toyota, Nissan and Honda's Profit in 2nd Quarter May Gain on Weakening Yen
Earnings at Toyota Motor Corp., Nissan Motor Co. and Honda
Motor Co., Japan's three largest carmakers, may gain from a
weaker-than-expected yen in the fiscal second quarter as sales
surge in the U.S., their biggest market. The Japanese currency
averaged 111.23 yen against the U.S. dollar in the three months
to Sept. 30, compared with Toyota and Nissan's assumption of
105 yen and Honda's 106 yen. The yen traded at 114.32 yen
against the dollar today in composite trading in New York,
reaching 16-month low. ``The weaker yen will aid the carmakers'
earnings in the quarter in addition to their cost cutting
efforts,'' said Yoshihiro Okumura, a general manager at
Chiba-gin Asset Management Co., which manages the equivalent of
$365 million in assets, including auto shares. ``Investors are
buying auto shares on the expectation of double-digit growth in
the next fiscal year.'' Record gasoline prices have boosted
demand for fuel- efficient cars, such as Toyota's Prius and
Honda's Civic. The carmakers earn as much as 74 percent of
their operating profit in the U.S. As the yen weakens, the
value of dollar-denominated sales for Japanese automakers rises
when the revenue is repatriated into yen.
Jupiter in Talks With Vodafone K.K. to Offer Cell-Phone Service in Japan
Jupiter Telecommunications Co., Japan's largest cable TV
provider, said it's in talks with operators such as the local
unit of Vodafone Group Plc and Willcom Inc. to start offering
mobile phone services next year. Jupiter shares rose. ``We aim
to decide on which operators to offer the service with by the
end of the year and start the business early next year,'' said
Tomoyuki Moriizumi, chief executive of Jupiter, which is
controlled by U.S.-based Liberty Media International Inc. ``We
plan to offer a voice service to our cable customers, and may
eventually tie up with several operators.'' Japan's
telecommunications industry is opening up for competition for
the first time in 12 years as the government prepares to issue
licenses and existing operators offer to lease their networks.
Softbank Corp., eAccess Ltd. and IPMobile Inc. are bidding to
operate high-speed services by building their own networks to
compete against NTT DoCoMo Inc., the country's biggest mobile
operator, KDDI Corp. and Vodafone K.K. ``We don't want to take
a huge risk because the mobile phone service will be a
complement to our main cable TV service,'' Moriizumi said in an
interview. ``Our entire investment for the service won't even
reach 1 billion yen ($8.7 million) since we won't be building
networks.''