Asia watch

By THIS IS MONEY
Updated:

 

Success in acquiring the nationalised Nippon Credit Bank has earned Japanese internet investor Softbank a downgrade from broking house UBS Warburg.

Softbank shares fell more than 3% at one point in Tokyo today in the aftermath of yesterday's announcement, which will see a Softbank-led consortium take control of the NCB for just under US$1bn (£680m).

The move, while opening up financial services and e-commerce to Softbank, is worrying analysts concerned about the company's debt burden and lack of experience in running a bank.

Shares in other members of the consortium were mixed, with leasing firm Orix down and insurer Tokio Marine and Fire moving higher.

UBS Warburg today downgraded Softbank to hold from buy, with analyst Kota Nakako concerned about NCB's continuing exposure to ailing property firms. 'Nippon Credit Bank has extensive loans to old-economy firms and its restructuring will not be easy,' Nakako said in a report.

The concerns on Softbank came amid lacklustre trade on the Tokyo share market, the Nikkei 225 down 25.12 points at 17,144.96. Caution prevailed, with little to inspire from overnight trading in America and most investors waiting for first quarter growth figures due on Friday. Among other active stocks, exporters such as Sony and Canon were helped by the US dollar's drop to around the 105 yen level.

Sentiment was also cautious in Hong Kong, with the Hang Seng index advancing a modest 26.78 to 15,888.46 by the mid-session break.

Leading blue-chips Hutchison Whampoa, China Telecom and Cheung Kong were all in negative territory, with the market supported by bank shares, sector leader HSBC adding more than 2% to HK$91.50. Shares in shipping firm Wah Kwong, also listed in London, jumped more than 16% after two minority shareholders, one of them Compagnie Maritime Belge, offered to buy out the company and take it private.

News that Japanese video games maker Sega would lift its stake in Cheong Ming Holdings from 32.37% to 34.49% sent the company's shares surging by 20%. Cheong Ming will soon be renamed Sega.com Asia.

Elsewhere, the biggest negative move came in Malaysia, where selling by foreign investors saw the Composite fall to a five month low, down 21.13 to 850.70. The market, one of the world's best performing in the first quarter of this year, is now about 15% off its year-highs.

Korea's market continued its rebound, with hopes of government restructuring of the finance industry sending bank shares higher, the broader Kospi up 23.49 to 817.70. The index has jumped more than 20% since last week.

In Sydney, top-ranked oil producer Woodside Petroleum announced a complex deal to acquire BP Amoco's rights in the North West Shelf Venture area off Western Australia.

Woodside will carry A$4m of BP Amoco's costs this year, as well as covering A$8.5m over the next three years. Woodside shares fell about 1% in a weaker market, the All Ordinaries off 18.70 to 3087.10.

Thailand's SET added 0.68 to 346.11, Taiwan's Composite was up 125.81 to 9084.02, and Jakarta's Composite was almost unchanged, 0.18 better at 452.94. Singapore's Straits Times improved 16.52 to 2018.24.

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