Nikkei slips from 6-wk high, shaken by euro zone doubts
* Investors also mull U.S., Japanese earnings* China data weighs on exporter sharesBy Lisa Twaronite and Hideyuki SanoTOKYO, Oct 18 (Reuters) - Japan’s Nikkei share average fell
more than 1 percent on Tuesday from a six-week high hit the
previous day on concerns that Europe’s plan to contain its debt
crisis might not be as fast and comprehensive as some investors
had expected.Olympus Corp continued to drop in volatile trading
after the camera and endoscope maker abruptly dismissed its CEO
last week.Shares of exporters, which had benefited from optimism on
the euro zone’s debt plan, underperformed the overall market and
were also pressured by news that China’s economic expansion
slowed in the third quarter to its weakest pace since early
2009.Germany deflated hopes for a quick end to Europe’s debt
woes, when its finance minister said on Monday that a summit of
EU leaders next Sunday would not produce a “definitive solution”
to the region’s sovereign debt crisis.But some strategists said that expectations for Europe’s
plan could rise again as quickly as they fell.”Stocks rallied in recent sessions on positive news from
Europe and expectations of more to come, and then they
corrected, but the weekend meeting could reassure investors and
prompt them to buy back shares,” said Yutaka Miura, senior
technical analyst at Mizuho SecuritiesThe Nikkei average fell 1.5 percent to 8,749.21,
while the broader Topix index lost 1.3 percent to
752.09.Support for the Nikkei is seen around 8,689, a 38.2 percent
retracement of its rally to Monday’s six-week closing high from
its Oct. 5 low, and then at its 25-day moving average, now
around 8,650.”As long as the Nikkei stays above its 25-day moving
average, I think the market’s uptrend will continue,” said
Toshiyuki Kanayama, an analyst at Monex Securities, adding that
he thinks the market is in a rising trend after forming a double
bottom in late September to early October.UNDER PRESSUREOlympus continued to trade heavily, ending the morning
session 1 percent higher, only to give back the gains in the
afternoon, hitting a fresh 2-1/2 year low of 1,366 yen.The stock has lost 44 percent since the firm fired its CEO
on Friday. It has come under pressure to disclose details of
payments to advisers in the buyout of a UK-based medical
equipment firm.Ousted Chief Executive Michael Woodford has accused the
board of firing him for probing allegations of improper payments
related to acquisitions, according to media reports.The company told investors on Monday that it may take legal
action against Woodford, accusing him of disclosing confidential
information in media interviews.Investors are also focused on this week’s U.S. corporate
earnings, including those from Apple Inc , Intel
Goldman Sachs and Bank of America .Japanese companies will also release earnings beginning in
the final week of October. Analysts are generally upbeat on the
past quarter as companies are recovering from the damage from
the earthquake and nuclear accident in March.Still, the yen’s strength and signs of slowdown in the
global economy are hurting some companies, especially exporters.Yaskawa Electric , which cut its operating profit
outlook for the year to March to 14 billion yen from 20 billion
yen on the strong yen and slow sales of motors used in
chipmaking equipment, dropped 2.4 percent to 612 yen.KDDI Corp fell 4.3 percent to 558,000 yen, while
rival Softbank shed 3.9 percent to 2,451 yen after
Japanese business daily Fuji Sankei Business i reported that the
nation’s biggest phone operator NTT DoCoMo is
considering a cut of about 20 percent in its fees for
smartphones.Docomo shares fell 2.2 percent to 136,600 yen.
Samsung expands sales ban requests against Apple
Since April, Apple and Samsung have been locked in an acrimonious legal battle in 10 countries involving smartphones and tablet computers as they jostle for the top spot in the fast-growing markets. Apple is also Samsung’s biggest customer, buying mainly chips and displays.Samsung’s latest salvo came after the South Korean electronics giant suffered a series of setbacks in its ongoing legal battles with Apple.Apple has scored preliminary injunctions against some Samsung products in Australia, Germany and the Netherlands, and further seeks to block sales of Samsung models in the United States, the key smartphone battleground.Samsung saw its request for a sales ban against some Apple products rejected by a Dutch court on Friday.Samsung said on Monday that it had appealed the Australian court’s decision to grant a preliminary injunction on the Galaxy Tab 10.1.”We do respect Apple as our biggest client but we won’t stand idly by, letting them infringe on our interest,” Samsung Electronics CEO Choi Gee-sung was quoted as saying by a spokesperson last week.The president and chief operating officer of Samsung Electronics, Lee Jae-yong, left for the United States on Sunday to attend Apple’s private memorial service for Steve Jobs, a spokeswoman for Samsung Group said.Local media speculated that Lee may have a separate meeting with Apple CEO Tim Cook and discuss ways to resolve the intensifying legal row, but the spokeswoman denied the reports.
Newt Gingrich raises $808,000 for presidential bid
But he has struggled with low poll numbers and experienced an exodus of campaign staffers over the summer.He ended the period with roughly $350,000 cash on hand, having spent over $770,000, his campaign said.Gingrich’s fundraising numbers for the quarter lagged far behind Texas Governor Rick Perry’s $17 million and former Massachusetts Governor Mitt Romney’s $14 million. Businessman Herman Cain, who is rising among Republicans in opinion polls, raised $2.8 million in the third quarter.Gingrich’s campaign expressed optimism about its outlook.”Looking at every indicator, Gingrich has momentum going in to the fall and will be the alternative to the frontrunner,” spokesman R.C. Hammond said in a statement releasing the figures.Gingrich led the “Republican revolution” in 1994 congressional elections that brought his party to power in Congress with a series of pledges know as the “Contract with America.” He then served as House speaker for nearly four years.
U.S. government eyes risk-sharing in housing bonds
Fannie Mae and Freddie Mac buy mortgages from lenders to
free up cash for banks to make more loans. The two companies
then repackage the loans for sale to investors as securities
and charge fees to guarantee the debt.Under the private-sector risk-sharing idea, they would
begin to issue some bonds without a federal guarantee.Investors in those securities would receive a higher
return to compensate them for the greater risk of losses,
according to the people familiar with the matter. The Wall
Street Journal first reported on the possibility on Friday.The idea is just in the concept stage. The administration
could consider a variety of ways to get investors to take on
more credit risk, one source said.The administration and housing regulators are eyeing the
possibility of using derivatives or relying on greater
mortgage insurance coverage for the loans underlying the bonds
to spur private-sector interest, according to the sources.Any final plan on investor risk sharing would require the
approval of the Federal Housing Finance Agency, which oversees
Fannie Mae and Freddie Mac.The Obama administration would like to begin testing ideas
to bring in greater private-sector involvement as early as
next year, the sources said.The approach under consideration would reduce the
long-term risk exposure of Fannie and Freddie. Together with
the Federal Housing Administration, the companies now fund
roughly 90 percent of all new U.S. mortgages.FHFA’s acting director, Edward DeMarco, said in a speech
last month that his agency is considering various alternatives
to attract private investors to the market through different
types of risk-sharing structures.
New Issue-EBRD prices $1.25 bln 2016 bond
Borrower European Bank for Reconstruction and Development(EBRD)Issue Amount $1.25 billionMaturity Date October 20, 2016Coupon 1.375 pctIssue price 99.909Spread Minus 1 basis pointsUnderlying govt bond Mid-swaps, equivalent to 31.9bp over the CT5Payment Date October 20, 2011Lead Manager(s) Morgan Stanley, Goldman Sachs & HSBCRatings Aaa (Moody’s), AAA (S&P),AAA (Fitch)Listing LondonFull fees UndisclosedDenoms (K) 1Governing Law EnglishNegative Pledge YesForce Majeure YesCross Default YesNotes Launched under issuer’s GMTN programmeSecurity details and RIC, when available, will beonCustomers can right-click on the code forperformance analysis of this new issue
Tokio Marine Capital eyeing $906 mln sale of drugmaker-sources
Tokyo-based Showa Yakuhin Kako is 50 percent owned by Tokio
Marine Capital. Polaris Capital Group, another Japanese buyout
firm, owns 23 percent, and a private equity arm of Pine Bridge
Investments has another 23 percent; these two also plan to sell
their stakes, the people said.Officials at Tokio Marine Capital declined to comment.The sale comes as Tokio Marine Capital raises money for a
new fund. The firm said in August it had obtained 10 billion yen
from investors in Japan and overseas and was continuing to raise
money.
