Thursday, October 10, 2013
Investors Focus On Firms Tracking Toward Record Results
TOKYO (Nikkei)--Investors are taking refuge in companies expected to log especially strong earnings in fiscal 2013 as such factors as continued tension over the debt ceiling in the U.S. exacerbate uncertainty in the market.
The Nikkei Stock Average has plummeted 5% between a recent high of 14,799 on Sept. 26 and Wednesday. But many companies in the Nikkei 500 index that are seeing either record earnings or significantly improved results logged major gains over this period.
Increasing disposable diaper sales in Southeast Asia are expected to carry Unicharm Corp. (8113) to a record high group operating profit this fiscal year, underpinning a 3.5% rise in its shares. Toshiba Plant Systems & Services Corp. (1983) is expected to log a record pretax profit, helping bring its price up 5%.
Oki Electric Industry Co. (6703) led the most-improved pack with a nearly 9% boost to its stock, thanks to an anticipated 60% increase in operating profit. Buyers flocked to the issue on news that stronger Chinese ATM sales helped the firm likely turn a net profit for the April-September half.
GS Yuasa Corp. (6674) expects a full-year pretax profit of 17 billion yen, up about 40% on the year and nearing the record of 18 billion yen. The market has high expectations that the adoption of environmentally friendly cars will offer a boost to the company's auto battery business.
A number of these strong performers have slightly smaller market capitalizations than big-name issues, putting them on a par with midsize businesses, and many are considered laggards. "The shift in the price of these lagging issues is helping shore up the market," says Makoto Morita of Daiwa Securities Inc.
The Nikkei average continued to rise Wednesday, with discussions over the U.S.'s financial issues expected to progress. But turnover in the 1st section of the Tokyo Stock Exchange remained below the 2 trillion yen mark that indicates strong activity, showing that investors are maintaining a wait-and-see posture.
(The Nikkei, Oct. 10 morning edition)