Japanese Stocks Rise the Most This Year, Led by Shipping Lines

Jan. 14 (Bloomberg) -- Japanese stocks rose the most this year, as shipping lines and machine-tool makers advanced on speculation higher cargo trade and orders will boost profit.

Mitsui O.S.K. Lines Ltd., the owner of the world’s largest shipping fleet, added 7.2 percent after the Nikkei newspaper said profit increased. Okuma Corp. and JTekt Corp., whose machines make parts and equipment, rose at least 4 percent after machine-tool orders surged, even as a separate report showed orders fell for other machinery from phones to excavators. Mizuho Financial Group Inc. climbed 5.7 percent on speculation it will boost capital through a rights offering.

“The trend in the economy is gradually getting better,” said Mitsushige Akino, who oversees about $450 million in assets in Tokyo at Ichiyoshi Investment Management Co. “It was confirmed that demand for machine tools in emerging countries is strong.”

The Nikkei 225 Stock Average rose 1.6 percent to 10,907.68 at the 3 p.m. close in Tokyo, its steepest gain since Dec. 22. The broader Topix added 1.6 percent to 959.01, the sharpest climb since Dec. 11, with three times as many stocks advancing as declining. The number of shares traded on the Tokyo Stock Exchange was the most since June 12.

The Topix had the lowest return last year among benchmark indexes in the world’s 10 largest stock markets, climbing 5.6 percent, on concern the government will be unable to revive economic growth and a stronger yen will hurt profits.

Stocks in the index trade at an average of 38 times estimated earnings, compared with 15 times for the Standard & Poor’s 500 Index in the U.S. and 13 times for the Dow Jones Stoxx 600 Index in Europe.

Machine Tools Vs. Machinery

Okuma jumped 14 percent to 583 yen, the second-steepest gain in the Nikkei 225. JTekt climbed 4.4 percent to 1,227 yen. Makino Milling Machine Co. surged 9.5 percent to 451 yen, the highest level since September 2008. Amada Co., which makes metal-cutting machines, rallied 6.1 percent to 694 yen.

Machine-tool orders rose 62.8 percent in December from a year earlier, the Japan Machine Tool Builders’ Association said in a preliminary report yesterday after stock trading closed. It was the first year-on-year gain since May 2008.

Separately, orders for broader machinery unexpectedly fell 11.3 percent in November from a month earlier, the Cabinet Office said today in Tokyo.

Shipping Lines Climb

Shipping lines rose the most among the Topix’s 33 industry groups. Mitsui O.S.K. Lines gained 7.2 percent to 623 yen, climbing the most since May 7. The Nikkei newspaper said Japan’s second-largest shipping line by sales may report a jump in October-to-December pretax profit to about 10 billion yen ($109.5 million). Strong demand for resources in emerging countries including, China and India, contributed to the increase, according to the Nikkei.

“I can see strength of demand in emerging markets,” said Kenji Sekiguchi, general manager of strategic research and investment at Mitsubishi UFJ Asset Management Co., which manages the equivalent of $61 billion. “We can actively invest in companies that have businesses in emerging countries. They are leading global growth.”

Nippon Yusen K.K., Japan’s biggest shipping line by sales, advanced 5.1 percent to 352 yen, and Kawasaki Kisen Kaisha Ltd., the No. 3, leapt 7.4 percent to 349 yen. The Baltic Dry Index, a measure of shipping rates for commodities, rose for a third day yesterday in London.

First Rights Offering

Banks were the second-biggest contributor to the Topix’s gain. Mizuho, Japan’s third-largest bank by market value, climbed 5.7 percent to 186 yen. The company is considering options to boost its capital, including what would be Japan’s first rights offering, three people familiar with the matter said. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, added 2.1 percent to 489 yen.

Sumitomo Mitsui Financial Group Inc. advanced 3.3 percent to 2,898 yen after Credit Suisse Group AG lifted its rating on Japan’s second-largest publicly traded bank to “outperform” from “neutral.”

Japan Airlines Corp. rebounded 14 percent to 8 yen from yesterday’s 81 percent drop. More than 1 billion shares changed hands, setting a record on the Tokyo Stock Exchange for the second day, and accounting for 30 percent of the bourse’s volume.

Kazuo Inamori was named chief executive officer of Asia’s largest carrier to help the company turn around. The airline’s main creditors agreed to support a government-led rehabilitation plan, Kyodo News Service reported today, without saying where it obtained the information.

Softbank Corp. jumped 8.6 percent to 2,370 yen, the highest level since Dec. 2007, and was the most-traded stock in Japan by value. The operator of Japan’s third-largest mobile-phone network climbed on speculation the company may benefit from its stake in Alibaba Group Holding Ltd., which operates Yahoo! Inc.’s portal in China, after Google Inc. said yesterday it may shut its Google.cn site and close its offices in the country. Credit Suisse Group AG also boosted its earnings outlook.