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Japan Hot Stocks-JR West, Sega, Nittyu, Photonics, Gentosha

TOKYO, Feb 18 (Reuters) - The following stocks are on the move on Tuesday. **JR WEST UP AFTER REPORT GOVT TO POSTPONE SHARE SALE**

West Japan Railway Co up 1.47 percent after the Nihon Keizai Shimbun newspaper said on Tuesday the government is set to drop its plan to sell its shareholdings in the railway operator by the end of the fiscal year, easing fears of oversupply.

The government will also postpone sales of shares in Japan Tobacco Inc (JT) , and Nippon Telegraph and Telephone Corp (NTT) , the paper said.

JT up 0.14 percent at 726,000, while NTT down 0.89 percent at 444,000.

The business daily said the government had called off the share sale plan to prevent further declines in Japan's stock markets before the fiscal year-end in March. 0500 GMT **SEGA CONTINUES FALL ON MERGER DOUBTS**

Sega Corp down 7.27 percent at 752, having touched a 27-month low of 731 on worries that its recently announced plans to merge with pinball-style "pachinko" machine maker Sammy Corp will not be enough to revive flagging sales of game software.

"It's hard to see any merit in this merger for Sega," said Shunji Yamashina, analyst at Morgan Stanley, who rates the stock "underweight".

Yamashina noted that while game software makers such as Sega sell at price-to-earnings (PER) ratios of around 15-25, pachinko and slot machine makers generally sell at PERs of five to 15.

That gap means Sega's valuation will likely fall closer to Sammy's, implying further downside, he said. 0423 GMT **NITTYU 3X ABOVE IPO PRICE IN DEBUT ON JASDAQ**

Parking lot business adviser Nittyu Co Ltd last traded at 370,000 yen, nearly three times its initial public offering (IPO) price in its debut on the Jasdaq market for start-up firms.

Nittyu was expected to be a hot IPO due to its prospects for growth and attractive valuations. At the IPO price of 130,000 yen, Nittyu would have had a price-to-earnings ratio (PER) of 10. That compares with peer Park 24 Co Ltd's PER of 25.

Nittyu, currently trading at a PER of 28, was the most active issue by value on the Jasdaq. It first changed hands at 320,000 yen and went as high as 400,000 yen. 0420 GMT **PHOTONICS ASK-ONLY ON LOSS WARNING**

Photonics Corp ask-only at 89,000 yen, 18.4 percent below Monday's close after which the maker of measurement sensors for semiconductor-manufacturing equipment said it now saw a group net loss of 393 million yen ($3.3 million) for the six months ended December 2002.

The company had previously forecast a profit of 90 million yen, but now expects sales of 666 million yen for the six month period, compared to its earlier estimate of 1.10 billion yen. 0341 GMT **GENTOSHA UP ON SHARE-SPLIT, HIGHER DIVIDEND**

Gentosha Inc up 5.98 percent at 1.95 million yen after the book publisher said on Monday it would conduct a three-for-one stock split on May 20 to improve the liquidity of its shares.

The company also tripled its dividend forecast to 15,000 yen for the year to March 31 . 0333 GMT **BRIDGESTONE DOWN ON HIGH RUBBER PRICES**

Bridgestone Corp, Japan's largest tyremaker, down 4.11 percent at 1,330 yen after Asian rubber prices hit their highest levels since 1996 on Monday helped by strong demand in China.

Thailand, Indonesia and Malaysia account for a lion's share of the world's rubber production.

Bridgestone is set to unveil its 2002 earnings and 2003 forecast on Friday, and many analysts have already expressed concerns over the impact that higher rubber prices could have on the tyre giant this year.

Shares in Toyo Tire & Rubber Co Ltd down 3.65 percent at 264 yen, and the Tokyo Stock Exchange's rubber products sub-index down 2.91 percent at 1002.24. 0146 GMT **BANDAI UP ON UPBEAT PROFIT REPORT**

Bandai Co Ltd up 3.97 percent at 3,930 yen on a report in business daily Nihon Keizai Shimbun that the toymaker could beat its own consolidated recurring profit forecasts by six percent to 26 billion yen ($216 million) in the business year to March.

Japan's largest toymaker said in November it expected a full-year recurring profit, which is pre-tax and excludes extraordinary items, of 24.5 billion yen. The paper said Bandai aims to raise annual group sales to 300 billion yen by 2005/06 under a three-year plan starting in April, compared to a revenue estimate of 230 billion yen for this year. 0119 GMT **NIPPON CONLUX UP AGAIN AFTER BID FROM MARS**

Nippon Conlux Co Ltd untraded with a glut of buy orders at 700 yen -- 100 yen or 16.67 percent above Monday's close -- after a unit of unlisted U.S. firm Mars Inc said it will launch a tender offer for all of Nippon Conlux's outstanding shares.

Nippon Conlux makes coin mechanisms for vending machines.

Its share price has risen 40 percent since Monday's announcement that Mars Electronics International (MEI), a U.S. maker of transaction electronics products, plans to offer 710 yen per share, a 42 percent premium over Friday's close of 500 yen.

The offer will begin on Tuesday and close on March 13.

0053 GMT **SMFG FALLS AGAIN ON SHARE ISSUANCE**

Sumitomo Mitsui Financial Group Inc down 5.35 percent at 354,000 yen after the bank announced plans on Monday to issue an additional 300 billion yen ($2.5 billion) in preferred shares. Its stock price fell seven percent on Monday.

One analyst cited concerns that the new shares could be snapped up by hedge funds that will buy the preferred shares and sell the common stock. SMFG said the new shares would be targeted at foreign institutional investors.

The banking sector subindex was down 1.41 percent. 0036 GMT

**TOKYO ELECTRON RISES AFTER STRONG SEMI DATA**

Tokyo Electron Ltd, Japan's biggest producer of chip-making equipment, up 0.86 percent at 5,860 yen after industry group Semiconductor Equipment and Materials International said on Monday that global sales of chip-making equipment rose 43 percent in December from the month before to $1.82 billion.

Chip-testing equipment maker Advantest Corp up 0.54 percent at 5,550 yen. 0024 GMT **SHIMAMURA DOWN ON NEW SHARE ISSUANCE PLANS**

Shimamura Co Ltd down 4.41 percent or 290 yen at 6,290 after the clothing chain operator said on Monday it plans to issue 1.2 million new shares, equivalent to about 3.4 percent of shares outstanding, to procure funds to redeem corporate bonds. 0012 GMT ($1=120.32 yen)