Posted on 16 Jul 2009
Nisshin Steel Co. climbed the most in five weeks in
Shares of the steelmaker jumped 8 percent to 190 yen as of the 11 a.m. morning close on the Tokyo Stock Exchange, heading for the largest increase since June 10. The stock had the third- biggest percentage gain among 1,654 companies on the MSCI World Index.
Nippon Steel will raise its stake in Nisshin Steel to as much as 20 percent from 10 percent, the Asahi newspaper reported, without saying where it obtained the information. No decision on increasing the stake has been reached, Nippon Steel, which added 4.3 percent to 340 yen, said on its Web site today.
“A stronger alliance between Nisshin Steel and Nippon Steel would have a positive profit impact on both companies,” Yuji Matsumoto and Kentaro Maekawa, analysts at Nomura Holdings Inc. with “buy” ratings on both companies, wrote in a Japanese-language report dated today. “Nisshin Steel will have a bigger impact as its stainless-steel sales occupy a higher percentage of total sales.”
Nisshin Steel will in turn acquire a stake in a stainless steel subsidiary of Nippon Steel, Asahi also reported. The two Tokyo-based companies plan to sign an agreement this autumn after obtaining regulatory approval, according to the report.
