Japanese stocks fell last week, led by Sumitomo Mitsui Financial Group Inc and other lenders, as plans by the nation's five-biggest banks to sell shares increased concerns that shareholders will have their holdings diluted.
The Nikkei 225 Stock Average declined 2.2 percent for the week, while the TOPIX index shed 2.1 percent. Japan's top five lenders, including Mizuho Holdings Inc, plan to raise ¥2 trillion (US$2.5 billion) by the end of March -- a fifth more than total Japanese stock sales last year -- to replenish funds used to write off bad loans.
Japan's top four banks were among the 10 biggest losers on the Nikkei last week with Sumitomo Mitsui the worst, slumping 22 percent to become the most active stock for the past five days.
Sumitomo Mitsui Financial, Japan's No. 2 bank, sold 300 billion yen of preferred securities to overseas investors. Some investors had sold the stock to lower the conversion price on the new shares.
The lender announced earlier last week that it would sell 100,000 preferred shares that could be changed into common shares as early as April.
Other banks dropped on concern that their efforts to raise capital will dilute the value of existing shares. Mizuho Holdings Inc, which is asking its corporate clients to buy ¥850 billion of preferred stock, slipped 18 percent this week. UFJ Holdings Inc, which is getting a ¥120 billion investment from Merrill Lynch & Co, slid 16 percent in the past five days.
South Korea
South Korea's KOSPI index rallied 4.9 percent, its biggest weekly gain since the five days ended Oct. 19. The benchmark rose after comments by US President George W. Bush and UK Prime Minister Tony Blair allayed concerns a war with Iraq may be delayed or averted.
Samsung Electronics jumped 11 percent last week, leading the KOSPI higher.
The company generates about a fifth of its sales in the US where it supplies memory chips to companies such as Dell Computer Corp.
LG Electronics Inc, which exports 60 percent of its products such as refrigerators and air conditioners, rose 9.7 percent.
TAIWAN
For the week, the TAIEX Index rose 1.2 percent, while Australia's S&P/ASX 200 Index gained 0.1 percent. Hong Kong's Hang Seng Index added 0.5 percent.
Taiwan Semiconductor Manu-facturing Co (TSMC,
"There's a sense of relief in the market that the US won't rush into war without the commitment of the international community and that's working for stocks," said Sadaji Shibata, who oversees about US$68 billion in assets as chief investment officer at Daiwa Asset Management Co in Tokyo.
Japanese exporters such as Honda Motor Co and Fuji Photo Film Co were among the 10 biggest contributors to the TOPIX's gain last week, after a report on US industrial production signaled that overseas demand may recover.
Honda, the world's No. 3 automaker by market value, expects North American sales to jump 11 percent to 1.52 million autos for the business year to March 31, 2003.
Fuji Photo added 1.4 percent. Shares of Fuji Photo Film were reiterated "overweight" by JP Morgan analyst Hisashi Moriyama last week.
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