Japan Insurance Shares Gain on Merger Speculation; Oji Drops
Japan's insurance stocks jumped on speculation a merger of three non-life insurers will reduce competition. Oji Paper Co. led a decline by papermakers on a newspaper report falling demand is weighing on earnings, Bloomberg reported.
Mitsui Sumitomo Insurance Group Holdings Inc. was poised to jump after two people familiar with the matter said the company is in talks to merge with two competitors. Elpida Memory Inc., Japan's No. 1 memory chipmaker, gained 6.8 percent after saying it's begun merger talks with Taiwanese semiconductor companies. Oji slumped 3.9 percent after the Nikkei newspaper said nine- month profit may be flat.
The Nikkei 225 Stock Average inched up 5.21, or 0.1 percent, to 8,744.73 as of 9:28 a.m. in Tokyo. The broader Topix index gained 3.91, or 0.5 percent, to 850.49.
"If you see mergers, it's a good sign. It shows that companies are starting to understand that there's value out there and are beginning to take advantage of the cheap valuations," said Nader Naeimi, a Sydney-based senior investment strategist at AMP Capital Investors, which manages about $85 billion.