Tokyo Market: Mixed week ahead as year-end sales loom
Sunday 28 February 1999
Small-cap issues such as toymaker Tomy and telemarketer Moshi Moshi Hotline, may climb as the over-the-counter index goes on rallying. The Jasdaq of OTC stocks has surged 50 per cent since October as investors have sought growth.
"Although gaijin (foreigners) are pretty aggressive buyers, unwinding of corporate cross-shareholdings should put a cap on the market around 14,500," said Scott McGlashan, director at Perpetual. "The real action is likely to remain in the small-caps until April, as these stocks don't have the push-me-pull-you influences keeping the large-caps in a fairly tight range."
The benchmark Nikkei 225 rounded off a second week of gains, climbing 2 per cent. There is pressure on Japanese banks and companies to dress up balance sheets by posting any gains they can on equities, and selling to raise cash for year-end debts.
"Generally corporations in Japan still want to reduce their equity," said Celia Farnon, an equity saleswoman at Nomura Securities. "It's easier to sell a share than to lay off a worker."
Yet, with the Nikkei on target to post its worst fiscal year-end close in 14 years, traders are anticipating an influx of government-linked pension funds in the next few weeks to avoid a worst-case scenario. "The only hope for the market is a healthy injection of public funds heading into March," said Dhia Bitar, at Nomura Securities.
Investors are turning to small-cap issues in new industries such as the internet, or service niches, and have bought telecoms and pharmaceuticals. "Earnings are going to be lower than this market expects," said HSBC Securities strategist Garry Evans. "But telecoms will be fine, even if the economy goes back into recession."
Bonds are likely to fall as demand for next week's sale of six-year government bonds may encourage investors to sell 10-year bonds. "Investors looking to reduce risk could provide demand," said Koji Hozumi, a fixed-income manager at New Japan Securities. Last week, the benchmark government bond yield rose 13 basis points to 1.885 per cent.
- 1 Vladimir Putin says Russia will fight for the right of Palestinians to their own state
- 3 Germanwings plane crash: I have depression. That doesn't make me a psychopath
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat
Vladimir Putin says Russia will fight for the right of Palestinians to their own state
Ohio Democrat Teresa Fedor speaks out during abortion debate to reveal she has been raped – and is interrupted by laughter from Republicans
Germanwings plane crash: Investigators may have already found remains of suspected killer co-pilot Andreas Lubitz
Children take eight Isis captives to be beheaded in latest propaganda video
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...