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Citigroup shares open up in first day of Tokyo trade

Citigroup Inc, the largest US bank, rose on its first day of trading in Tokyo as chief executive officer Charles Prince resigned to take responsibility for losses stemming from US mortgage defaults.

The bank's shares closed ?220 (US$1.92), or 5.1 percent, higher at ?4,550 after rising as much as ?4,580. About 10,000 shares were traded compared with 138.7 million in New York on Nov. 2 when the stock slumped to a four-year low.

The US bank listed in Tokyo after buying Nikko Cordial Corp, Japan's third-largest brokerage, this year.

"It's hard to be optimistic on the business outlook despite the strength we're seeing in the stock today," said Naoki Fujiwara, who helps oversee US$3.2 billion at Shinkin Asset Management Co in Tokyo. "The direct impact of subprime problems seems to be fading but they have yet to deal with ripple effects from the turmoil."

Citigroup bought 61 percent of Nikko Cordial for US$7.7 billion in April, and increased the stake to 68 percent in June. It said last month it's buying the rest and will delist Nikko shares after expected completion of the purchase in January.

Nikko gives Citigroup about 110 branches in the world's second-largest economy, narrowing a gap with Mitsubishi UFJ Financial Group Inc, Japan's biggest publicly traded bank. Citigroup incorporated its bank unit locally earlier this year, making it a Japanese bank for regulatory purposes.

The takeover also enables Citigroup to expand investment banking in Japan through its joint venture with Nikko, as well as offer wealth management services. The US group first listed in Japan in 1973 before withdrawing in 1998 when Citicorp merged with Travelers Group Inc.
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