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To: KeepItSimple who wrote (150765)	2/12/2002 1:47:56 AM
From: GraceZ	Read Replies (2) \| Respond to of 436258

No doubt its a dumb desperation move. They are even going to announce a schedule. biz.yahoo.com Japan stock-buying body to detail timetable soon TOKYO, Feb 12 (Reuters) - Japan's state-backed stock-buying body will decide soon on the period during which banks will be able to sell it their unwanted stockholdings, an official at the body said on Tuesday. ADVERTISEMENT Banks' Shareholdings Purchase Corp has been set up with state backing to buy shares from banks, a move that could help stem the recent slide in the Tokyo stock market and shore up banks' capital, hit by losses on their shareholdings. In response to calls for prompt action from Finance Minister Masajuro Shiokawa and Financial Services Agency Minister Hakuo Yanagisawa, the body is likely to call a meeting of committee members this week to decide on a purchasing schedule, which could start later in the week, industry sources said. Japanese stocks slid to 18-year lows last week on concern over the slow progress in banks' bad debt disposal and the worsening economy. Japan's top banks on Tuesday reiterated they would ``actively'' make use of the body but said nothing had been decided on the specific amount or individual shares they would sell. Banks will be eager to get rid of shares before the financial year closes at the end of March, when they will have to book their stockholdings at market value. The period during which the body would be open to make purchases could last for some weeks, the official said. It will set fixed periods whenever necessary during which banks can sell shares. The stock-buying entity, set up on January 30 by a group of more than 100 financial institutions, aims to help banks rid themselves of stockholdings whose fall in value has eaten into their capital at a time when bad loans are also causing them huge problems. It can borrow up to two trillion yen ($15 billion) from banks, with a government guarantee, to finance the purchases as banks unwind cross-shareholding ties with their corporate clients. Raising that cap would require a regulatory revision. The government guarantee would ease the concerns of lenders as loans would be sure to be fully repaid, while allowing the entity to undertake long-term borrowing at low cost. Under its rules, the body will be able to buy shares at the closing price on the day before transactions take place or at a volume-weighted average price as calculated by the total value of stocks traded in a stock on a given day divided by the total volume of stocks traded in that security on that day. The body will use its capital totalling some 10.7 billion yen tipped in by the financial institutions plus fees from banks -- eight percent of their proceeds from stock sales -- to cover losses over its projected 10-year life. Any losses above that would have to be covered by taxpayer money. LIMITED EFFECT SEEN Analysts were sceptical about the body's effectiveness, saying the two trillion yen cap in outright purchases was too small given that the top four banks alone held over 20 trillion yen in stockholdings as of the end of September. The government passed a law in November that will require banks to limit their holdings in other firms to an amount less than their capital from the business year starting in April 2004. According to estimates by Daiwa Institute of Research (DIR), latent losses on stockholdings at the top eight banks stood at around 4.8 trillion yen as of the February 4 Nikkei 225 closing of 9631.93, the latest estimates available. The index closed on Tuesday at 9,877.99. For every 1,000-point drop in the Nikkei average, banks' latent losses would rise by about 2.5 trillion yen, DIR said. In addition to the two-trillion yen outright purchase, the body may also act as an intermediary for securities firms looking to buy specific stocks to be included in mutual funds or other products. Banks must also pay commission fees to the body if they sell stocks in this way. Hopes for some government action to help banks restore their battered capital boosted bank shares on Tuesday. Mizuho Holdings Inc , the world's largest bank by assets, was up 1.25 percent at 243,000 yen at 0535 GMT. The banking sector index was up 2.78 percent, outperforming the overall market benchmark, the Nikkei 225, which was up 1.98 percent. ($1 equals 133.35 Yen)