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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Shakush who wrote (9895)	11/17/1997 12:32:00 AM
From: Shakush	Respond to of 25960

Nikkei rally - This is Bullish? From FT.com, London I thought I read somewhere bank failures were bad news. Here's the link. You'll have to sign up. ft.com Hokkaido: Japanese bank goes out of business MONDAY NOVEMBER 17 1997 By Paul Abrahams in Tokyo Japan's 10th largest bank, Hokkaido Takushoku Bank, announced early today that it was going out of business because of its bad loans crisis. The move, which sent the Nikkei 225 average nearly 3 per cent higher in early trading, demonstrates the authorities' willingness to tackle the growing difficulties in the country's financial system. The dollar rose to above Y126. In a virtual declaration of bankruptcy, Hokkaido Takushoku said it was handing over its regional operations in its home base on the island of Hokkaido to North Pacific Bank, a Hokkaido-based mid-size regional bank. The collapsed bank was seeking a buyer for its Tokyo area operations. Hiroshi Mitsuzuka, finance minister, told a news conference that the Bank of Japan would provide funds to Hokkaido Takushoku to help it give depositors their money back. The funds are expected to come in the form of the BOJ's special unsecured loans, where the recipient bank does not have to put up collateral. The news came on top of an announcement at the weekend by Yamaichi Securities, the troubled Japanese securities house, that it was considering cutting its near 7,500-strong workforce by 26 per cent and closing most of its operations in the US and Europe. Yamaichi said yesterday the proposed restructuring was aimed at preparing it for deregulation of Japan's financial markets. Last week, Yamaichi's shares lost more than 40 per cent of their value, closing at an all-time low of Y100 (47p) amid speculation about its financial difficulties. After Friday's market close, Standard & Poor's, the rating agency, downgraded Yamaichi's debt rating to BBB, citing the broker's "inability to counteract unfavourable market conditions¡. In the previous week, Moody's, the ratings agency, had said it was considering downgrading Yamaichi's debt to junk level. Concern about the health of Japan's leading banks and securities houses has been a big factor in the 25 per cent slide of the Nikkei average of 225 leading shares since August. The consequent fall in the value of financial institutions' large holdings of equities has significantly reduced their capital bases. There are fears banks could begin tightening credit, exacerbating problems for the country's already shaky economy. The Japanese government on Friday announced a package of measures to stimulate the economy, but it did little to assuage investors' fears. The Nikkei lost 2.23 per cent on the day to close at its lowest level in more than two years. Another package will be published tomorrow and measures specifically aimed at helping the financial sector will be unveiled on December 10. Analysts said Yamaichi's proposed restructuring would be too little too late, and expressed concern that it appeared not to include the provision of any new capital to support the company. Japanese brokers are suffering from low volumes on the Tokyo stock exchange and face intense competition from foreign broking houses. "Yamaichi is moving too slowly," warned Robert Garone, financial analyst at Dresdner Kleinwort Benson in Tokyo. "The job losses won't be completed until 2000. They don't have the luxury of time." Yamaichi said it expected the number of employees to fall from 7,484 to about 5,000 by 2000, with most of the jobs lost through natural wastage.