Japan Stocks Rise on Konica Profit; Japan Tobacco, Takeda Gain

Source from:  By Masaki Kondo May 12 (Bloomberg) 05/13/2008

Japanese stocks advanced for the first time in three days after technology firms predicted higher earnings and as investors snapped up companies whose sales are relatively resilient to an economic slowdown. Konica Minolta Holdings Inc., the No. 2 maker of film used in liquid-crystal displays, jumped the most in seven years after forecasting a profit gain. Japan Tobacco Inc., the world's third- largest cigarette maker, climbed the most in a month, while Takeda Pharmaceutical Co. sent drugmakers higher. Nisshin Oillio Group Ltd. soared the most in three decades after the century-old cooking oil maker said profit may double this year. The Nikkei 225 Stock Average reversed early losses, gaining 88.02, or 0.6 percent, to close at 13,743.36 in Tokyo, while the broader Topix index added 1.03, or 0.1 percent, to 1,342.79. Almost the same number of stocks rose and fell on the benchmark. ``Investors are shifting their funds to defensive stocks from cyclical ones, as concern resurfaces the Japanese and U.S. economies will slow,'' said Mitsushige Akino, who oversees the equivalent of $468 million in Japanese stocks at Ichiyoshi Investment Management Co. in Tokyo. Higher commodities prices prompted Merrill Lynch & Co. to cut its 2009 growth forecast for Japan. Crude prices rose 1.8 percent to a new record of $125.96 a barrel on May 9, extending their gain to a sixth day. Konica Minolta climbed 12 percent, the sharpest leap since March 2001, to 1,672 yen and posted the biggest gain on the MSCI World Index. The company said on May 9 it expects profit to rise by 1.7 percent this year, counting on the Beijing Olympic Games to boost sales of LCD TVs that use its parts. `Robust' Profitability "The company's profitability remains robust despite the worsening market environment and strengthening yen," Hirokazu Mitsuda, a Tokyo-based analyst at Daiwa Institute of Research Ltd., wrote in a report dated yesterday. The yen has strengthened 16 percent against the U.S. dollar in the past 12 months, eroding the value of Japanese exports when converted into the domestic currency. Nihon Unisys Ltd. jumped 9 percent to 1,480 yen, the highest since Dec. 17. The computer-equipment wholesaler said today it expects its profit to grow more than fourfold this year. Japan Tobacco advanced 4.9 percent, the most since April 2, to 517,000 yen, while Takeda added 3.5 percent to 5,680 yen, contributing the most to the Topix's gain. Nisshin Oillio leapt 20 percent to 475 yen, the biggest gain since at least September 1974, based on the extent of Bloomberg price data. Cost cuts and sales of high-margin products will help boost profit 87 percent this year, the company said on May 9. Mitsubishi UFJ Nicos Co. dropped 6.8 percent to 369 yen, the sharpest slide since Sept. 21, and accounting for the second- biggest decline on the Nikkei. The company's net loss for the year ended March 31 widened 64 percent to 85.6 billion yen ($832 million), due to provisions for losses on loans, it said on May 9. Nikkei futures expiring in June added 0.7 percent to 13,760 in Osaka and climbed 0.6 percent to 13,750 in Singapore. To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net. Enditem