Japanese Stocks Fall as Companies Announce Plans to Sell Shares

Nov. 19 (Bloomberg) -- Japanese stocks fell, dragging down the Topix index for a seventh consecutive day, after companies announced plans to sell shares.

Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, tumbled 5 percent after announcing plans to sell as much as 1 trillion yen ($11.2 billion) in securities. Nomura Real Estate Residential Fund Inc. plunged 7.5 percent after its proposal to sell stock. Nihon Nohyaku Co. plummeted 15 percent as the maker of insecticides said earnings fell.

“There’s no reason to buy into Japan,” said Mitsushige Akino, who oversees the equivalent of $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “Domestic investors are looking more at foreign countries since Japan lacks any clear potential for growth.”

The Nikkei 225 Stock Average fell 1.4 percent to 9,541.99 as of 10:13 a.m. in Tokyo, set for the lowest since July 17. The broader Topix index lost 1.7 percent to 835.76, on course for its lowest since April 28, as four times as many stocks declined as advanced.

The Topix has fallen 1.1 percent this year, the only decline among the world’s 40 largest equity markets, according to data compiled by Bloomberg. That compares with increases of 23 percent for the Standard & Poor’s 500 Index in the U.S. and 26 percent for the Dow Jones Stoxx 600 Index in Europe. The global recession has sapped demand for Japanese companies’ products and the stronger yen has hurt exporters.

The ratio of investors who want to be “overweight” Japanese stocks during the next year against those who plan to be “underweight” dropped this month to the level of November 2002, according to a report dated yesterday from Bank of America Corp.’s Merrill Lynch & Co. brokerage.

Banks Slump

Banks fell the most today among the 33 industry groups in the Topix, after Mitsubishi UFJ announced its second share sale since January. The lender lost 5 percent to 460 yen. Mizuho Financial Group Inc. slumped 6 percent to 156 yen, on course for the lowest close since September 2003. Sumitomo Mitsui Financial Group Inc. tumbled 5.3 percent to 2,700 yen, set for its lowest in eight months.

Nomura Real Estate Residential plunged 7.5 percent to 356,000 yen, falling the most since Dec. 11. The company said it plans to raise as much as 11.5 billion yen in new shares.

T&D Holdings Inc. retreated 4.6 percent to 2,060 yen, heading for the lowest since Feb. 19. The insurer had its rating reduced to “neutral” from “above average” at Tokai Tokyo Securities Co.

Nihon Nohyaku plummeted 15 percent to 469 yen, set for the sharpest slide since October 2008. The maker of insecticides and fungicides said full-year net income fell 19 percent to 1.66 billion yen, missing its forecast by 21 percent. It expects profit to further drop this fiscal year.

To contact the reporters for this story: Akiko Ikeda in Tokyo at iakiko@bloomberg.net.