Executive Business Briefing

March 19, 2002 at 7:49 AM
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Here is a look at Tuesday's top business stories:

Stocks rise in Tokyo, Seoul and Sydney

TOKYO, March 19 (UPI) -- Stock prices on the Tokyo Stock Exchange ended sharply higher, lifted late in the session as high-tech and auto stocks attracted institutional investors and public funds due in part to the weaker Japanese yen.

Prices also rose in Seoul, South Korea; and in Sydney, Australia; but eased in Taipei, Taiwan; and Hong Kong.

Japan's blue-chip Nikkei Stock Average of 225 selective issues, which lost 149.63 points Monday, jumped 294.44 points, or 2.60 percent, to 11,792.82 -- its best level of the session. The broader Topix index rose 24.65 points, or 2.30 percent, to 1,112.79.

Advances hammered declines 1,173 to 237, while another 94 issues settled unchanged.

Volume jumped to an estimated 851.18 million shares from 725.07 million shares changing hands Monday.

Analysts said stocks extended their gains to close at their best levels as a solid downside in the Nikkei sparked renewed buying.

The Nikkei index rose from the outset, supported by interest in electrical, chip-making and electronic components stocks as well as auto stocks as institutional investors, who missed buying these stocks in recent surges, took advantage of the weak yen.

The U.S. dollar fetched 131.34 yen in foreign currency trading against 131.24 yen in New York late Monday, where it strengthened to as much as 131.57 yen at one point. The dollar has gained 2.40 percent against the yen in the last seven days.

Analysts said buying interested shifted to export-linked stocks, including high-tech and auto companies, on hopes a recovery in the United States will help turn their earnings around.

In trading, Hitachi jumped 7.9 percent and Mitsubishi Electric surged 12.7 percent after they said Monday they will integrate their system large-scale integrated chip operations into a joint venture.

Other chip makers also posted gains. NEC rose 5.7 percent, Toshiba gained 4.7 percent and Fujitsu rose 3.2 percent.

Among some of the electronic companies, Sony Corp. gained 3.6 percent, Matsushita Electric Industrial added 2.6 percent, Sharp rose 4.2 percent and Sanyo added 1.2 percent.

Meanwhile, the auto sector benefited from the yen's decline against the dollar, with truck makers especially helped by a report that four firms in the sector have agreed to impose strict and mutual emission rules to take a lead in technical expertise over their global rivals.

Hino Motors jumped 7.0 percent, Nissan Diesel Motor surged 12.4 percent, Mitsubishi Motors climbed 7.5 percent and Isuzu rose 1.3 percent.

Car makers also rose, with Toyota gaining 2.9 percent, Honda rising 2.9 percent and Nissan advancing 6.7 percent.

Electric wire and cable makers ended mostly lower on concerns the fiber-optic related market isn't close to bottoming, unlike the microchip market.

Furukawa Electric fell 1.9 percent, Sumitomo Electric declined 1.5 percent and Fujikura slipped 1.2 percent.

Elsewhere in Asia, prices on the Hong Kong Stock Exchange ended slightly lower as investors opted for the sidelines ahead of the FOMC meeting. The blue-chip Hang Seng Index slipped 7.80 points, or 0.07 percent, to 11,222.80.

Capping the market was China Mobile. Shares of the mainland's top cell phone carrier fell 1.8 percent. The company on Monday posted a 55 percent surge in its 2001 net profit, slightly exceeding the forecasts of several analysts.

China Unicom ended unchanged. Hutchison Whampoa, which has heavily invested in the third-generation cell-phone business, slipped 0.4 percent. Pacific Century CyberWorks rose 2.5 percent and HSBC Holdings added 0.5 percent.

Meanwhile, prices on the South Korean Stock Exchange ended at a 23-month high, lifted by foreign buying in large caps Samsung Electronics and Samsung SDI after U.S. chip stocks rose Monday.

The Korea Composite Stock Price Index, or Kospi, gained 20.27 points, or 2.3 percent, to 889.98 -- its highest level since closing at 908.51 on March 29, 2000.

Board leader Samsung Electronics rose 5.1 percent and Samsung SDI, one of the world's largest electronics display producers, jumped 8.2 percent.

Prices on the Taiwan Stock Exchange ended a quiet session in negative territory on a lack of fresh leads to encourage buying and declines in tech shares.

The benchmark Weighted Price Index of the Taiwan Stock Exchange lost 65.38 points, or 1.09 percent, to 5906.73.

Losers outnumbered gainers 359 to 271 while 74 issues ended the session unchanged.

MediaTek Inc. lost 3.4 percent on reports that United Microelectronics Corp., the world's second largest dedicated foundry, plans to pare its holdings in the IC designer.

Elsewhere in the Pacific region, prices ended slightly higher on the Australian Stock Exchange, supported by strength in the resource and banking sectors.

The blue-chip All Ordinaries Index rose 5.60 points, or 0.16 percent, to 3,404.20.

Bank stocks were keenly sought, on the belief local interest rates will rise by 100 to 150 basis points over the remainder of 2002, which has prompted an easing in bond yields.

Among the major banks, Macquarie Bank climbed 1.7 percent, National Australia Bank rose 0.4 percent and Commonwealth Bank of Australia rose 1.4 percent.

Firmer base metal prices aided the resources sector, with Rio Tinto strengthening 2.1 percent and BHP Billiton improving 1.0 percent.

Oil stocks advanced strongly on higher oil prices. Woodside Petroleum rose 3.4 percent and Santos gained 1.9 percent.

Timken sees higher results

CANTON, Ohio, March 19 (UPI) -- Ball bearing maker Timken Co. said it expects its first quarter earnings to exceed expectations due to a stronger than expected U.S. automotive business and to cost-cutting efforts.

Timken said it now expects to report a net profit, excluding any charges, of 15 cents to 20 cents a share, not a loss as previously forecast.

Wall Street analysts had been expecting a loss of 7 cents a share, according to Thomson Financial/First Call. Timken had earned 16 cents a share a year earlier.

Timken said the improvement is due to higher-than-expected revenues, increased efficiency resulting from the company's restructuring actions and aggressive cost management.

"With two months' results in hand, we can see that the first quarter will be better than we communicated in our year-end conference call," said W.R. Timken, Jr., chairman and chief executive officer.

"However, other than reflecting a stronger-than-expected U.S. automotive sector, our order books only tell us that the decline in manufacturing seems to have ended. As of this date, we have not observed a perceptible increase in broad-based manufacturing," Timken said.

"The company has benefited from new product applications and, in the case of steel, from penetration gains due to economically troubled competitors. President Bush's welcome decision on Section 201, which will impose tariffs on steel imports that impact 40 percent of the company's external steel product sales, and the newly signed Job Creation & Worker Assistance Act of 2002, should have a positive effect on the company's performance later in 2002. We also hope economic recovery will present greater sales opportunities in the second half," he added.

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