Asia watch

By THIS IS MONEY
Updated:

 

Japanese internet company Softbank today reached an in-principle agreement to buy the nationalised Nippon Credit Bank, paving the way for the company's expansion into e-commerce and the financial sector.

Softbank shares jumped 5% in a falling market as its consortium, which also includes leasing firm Orix and insurer Tokio Marine & Fire, struck a deal with the government's Financial Reconstruction Commission. Softbank's sole rival in the bidding, US investment group Cerebus Partners, withdrew yesterday, giving Softbank another chance after its consortium missed a 31 May negotiating deadline.

Few details of the deal were given, but it is believed that Softbank made major concessions to government demands to shoulder more of the bank's bad loan charges. Nippon Credit Bank, a former bastion of traditional Japan which specialised in property lending, collapsed under a mountain of debt and was nationalised in December 1998.

The gains for Softbank shares, which broke through 20,000 yen for the first time in a fortnight, came amid a weaker Tokyo market, the Nikkei 225 closing off 31.71 at 17,170.08. The mood was one of consolidation after a four-day rally, with the market now focused on first-quarter Japanese growth figures due on Friday.

Broking houses, banks and property firms led the retreat while the information and technology shares that drove the market yesterday were mixed. NTT Data and Fujitsu were higher but Sony and the NTT parent company fell.

A 'copycat coup' in the Solomon Islands saw shares in Sydney-listed miner Delta Gold lose 7.8% following reports that the company's gold mine in the country had been ransacked. Rebel gunmen, emulating tactics used in Fiji, have seized the Solomon Islands' Prime Minister.

Also in Sydney, shares in Emperor Mines, which operates a Fiji gold mine, moved lower due to the unrest there, shedding 1%. The two stocks lost ground despite a bounce in the gold index. On the broader Australian market, shares drifted lower after yesterday's euphoria. The All Ordinaries index was down 8.3 at 3096.8.

The main interest was white goods manufacturer Email, which confirmed that mining giant BHP had built a 12% stake. BHP is trying to stymie steel-producing rival Smorgon, which has launched a A$785m (£302m) takeover bid. Email shares were up about 3%.

Shares in accounting software group MYOB were among the best-performing, up 6.3% as the company upgraded its profit forecasts. Australia will introduce a 10% goods and services tax from 30 June, and small businesses are rushing to upgrade their accounts to prepare for the change.

In Singapore, media shares were under the spotlight after the government's decision to end the monopoly held by Singapore Press Holdings. Shares in SPH were off 1.8% in a weaker market. The Straits Times index shed 10.99 points to 1971.44.

News that central bank Governor Sjahril Sabirin was a suspect in a bank scandal undermined confidence in Jakarta, the Composite index falling 5.86 to 448.08.

Malaysia's Composite index continued its recent decline, losing 3.71 to 877.68, while Thailand's SET index fell 6.07 to 346.53. The Taiwan, Hong Kong and Seoul stock markets were closed for public holidays.

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