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Japan Hot Stocks-Mitsubishi Motors, Ishikawa Seisakusho, Takeda

TOKYO, Jan 27 (Reuters) - The following stocks are on the move on Monday. **MITSUBISHI MOTORS WEAK AFTER GS DOWNGRADE**

Mitsubishi Motors Corp down 3.41 percent at 283 yen, underperforming a 0.39 percent fall in the transport sector subindex after Goldman Sachs cut its rating on the stock to "underperform" from "inline".

In a report to clients, Goldman analyst Kunihiko Shiohara said that at a recent information meeting Mitsubishi had failed to provide sufficient explanation about its financial operations in the U.S, given concerns about its roughly eight billion dollars of financial liabilities there.

Goldman also said that given the recent rally in Mitsubishi's share price -- its shares have bounced back 39 percent from a 14-month low of 205 hit in October -- further gains were unlikely. 0517 GMT **ISHIKAWA SEISAKUSHO LEADS DEFENCE ISSUES UP**

Ishikawa Seisakusho Ltd, a leading textile machine maker that also makes equipment for the Defence Agency, up 13.64 percent at 75 yen, having touched a seven-month high of 76 yen as investors snap up defence-related issues ahead of an expected attack on Iraq by the United States.

Ishikawajima-Harima Heavy Industries Co Ltd , a maker of naval vessels and jet engines, up 3.25 percent at 127 yen.

Tokimec Inc , a maker of airborne and marine instruments and a major supplier to the Defence Agency, up 8.04 percent at 121 yen.

0421 GMT **TAKEDA HITS 3-YR LOW AS BANKS UNLOAD BLUE-CHIPS**

Takeda Chemical Industries Ltd down 1.1 percent at 4,510 yen after marking a three-year low of 4,500 yen, weighed down by selling by banks and insurers, which are looking to unwind cross-held shares before the end of the fiscal year in March.

"Selling by financial institutions seems to be driving Takeda's decline," said Masayoshi Okamoto, head of dealing at Jujiya Securities. "Another factor was that relatively few investors shorted Takeda, so the stock was left behind in last week's rally led by short-covering by foreigners."

BNP Paribas' analyst Tomokazu Kitamura said that worries about future sales of hit anti-ulcer drug Prevacid were also hurting Takeda's stock price. Prevacid is now facing competition in the U.S. from a generic alternative.

Heavy selling on Takeda was seen through Nikko Salomon Smith Barney, Okasan Securities, and UBS Warburg. 0400 GMT **TSUDAKOMA UP ON BRIGHTER EARNINGS OUTLOOK**

Tsudakoma Corp up 8.57 percent at 228 yen after the textile machine manufacturer said on Friday that it returned to the black in the year ended November 2002 with a group net profit of 597 million yen ($5.1 million), compared to a loss of 2.4 billion yen in 2000/01.

For the current year to November 2003, Tsudakoma said it expects net profit to nearly double to 1.00 billion yen on sales of 38.60 billion yen, up 5.4 percent year-on-year.

Tsudakoma, whose origins date back to 1909 when it started out producing silk looms, was the fifth biggest percentage gainer on the first section of the Tokyo bourse. 0200 GMT

**KANEMATSU UP ON ENERGY REORGANISATION PLANS**

Kanematsu Corp up 6.31 percent at 118 yen after the trading house announced on Friday that it will sell its residential liquefied petroleum gas to Iwatani International Corp in March to bolster its energy-related business.

Kanematsu plans to focus on its industrial LPG operations.

Iwatani down 1.74 percent at 169 yen. 0150 GMT **OTC SECURITY SOFTWARE STOCKS SURGE ON WORM VIRUS**

A number of security software stocks traded on the Jasdaq over-the-counter market rallied after computer systems worldwide were hit by a fast-spreading "worm" virus over the weekend.

Asgent Inc , an importer and developer of Internet security software, up 19.42 percent at 123,000 yen, Internet Security Systems KK up 25.12 percent at 269,000 yen, and Little eArth Corp up 27.12 percent at 225,000 yen. 0120 GMT **TAKARABUNE ASK-ONLY ON FAILURE**

Takarabune Corp ask-only with no buyers at 5 yen, 30 yen below the previous close after the Kyoto-based confectioner announced on Friday that it had filed for court protection from creditors, failing with 25.5 billion yen ($216 million) in debt.

The Osaka Securities Exchange said on Friday that Takarabune's shares would be delisted on February 25. 0100 GMT **TONENGENERAL UP AFTER LIFTING 2002 PROFIT FORECAST**

TonenGeneral Sekiyu KK up 1.54 percent at 726 yen after the refining arm of the ExxonMobil group in Japan said on Friday that it now expects a group net profit of 8.40 billion yen ($71.3 million) for 2002, more than double its earlier forecast of 4.00 billion.

Tonen said cold weather and the shutting down of some nuclear power plants helped lift demand for kerosene and other petroleum products, boosting margins. Tonen's sales are now seen at 1.93 trillion yen, compared to its previous estimate of 1.89 trillion. 0053 GMT **NTT DOWN ON REPORT OF POWER COMPANY COMPETITION**

Nippon Telegraph and Telephone Corp down 3.61 percent at 427,000 yen after the Nihon Keizai Shimbun reported on Sunday that communications carriers affiliated with power companies will soon start fibre-optics based Internet protocol (IP) services.

Unlike ADSL IP phone services, fibre-optics IP does not use conventional phone circuits, meaning that users will no longer have to pay basic monthly usage fees to NTT's local subsidiaries.

Tokyo Telecommunication Network Co, affiliated with Tokyo Electric Power Co , plans to begin the services at the end of February, the Nihon Keizai said.

"In the short term I think the impact on NTT's earnings will be limited since ADSL IP offers better cost performance compared to fibre-based services. I don't think fibre IP will spread all that quickly," said UFJ Tsubasa Securities analyst Motoharu Sone.

Even so, Sone said the report was weighing on NTT's stock. 0040 GMT **E*TRADE , SOFTBANK INV UP ON MERGER TALKS**

E*Trade Japan up 5.77 percent at 32,100 yen after Japan's biggest online brokerage and Softbank Investment (SBI), both financial units of Japan's Softbank Corp , said on Friday they planned to merge to better weather the market slump.

E*Trade and venture capital firm SBI said in a joint statement that they aimed to win approval from shareholders at the end of March once they had finalised the merger details.

SBI untraded with a glut of buy orders at 55,200 yen, 1,500 yen or 2.8 percent above Friday's close of 53,700 yen. 0015 GMT **SAPPORO FALLS AFTER CUTTING PROFIT FORECAST**

Sapporo Breweries Ltd down 3.74 percent at 206 yen after Japan's third-largest beer maker said on Friday it had cut its 2002 group net profit forecast by 23.8 percent to 1.6 billion yen ($13.6 million) on slumping sales of beer and low-malt "happoshu".

The new forecasts would mark a significant drop from the beer maker's 2001 results, when it posted a group net profit of 4.39 billion yen on 557.23 billion yen in sales. Sapporo sees sales of 512 billion yen for the previous business year to December 2002. 0007 GMT **TREND MICRO UP AFTER WORM VIRUS HITS INTERNET**

Anti-virus software manufacturer Trend Micro Inc untraded with a glut of buy orders at 2,155 yen, 1.9 percent above Friday's close of 2,115 yen after computer systems worldwide were hit by a fast-spreading "worm" virus over the weekend.

In what experts called the most damaging attack on the Internet in 18 months, the worm, known as SQL Slammer, targetted a known weakness in Microsoft Corp's software to shut down powerful server computers and clog the pipelines of the worldwide network. 0002 GMT ($1=117.82 yen)