Nikkei bounces back on SoftBank Group’s strength

The Nikkei rebounded Wednesday despite persistent concerns over the COVID-19 outbreak thanks to the popularity of technology investor Softbank …

The Nikkei rebounded Wednesday despite persistent concerns over the COVID-19 outbreak thanks to the popularity of technology investor Softbank Group Corp.

The 225-issue Nikkei average of the Tokyo Stock Exchange rose 175.23 points, or 0.74 percent, to end at 23,861.21, after falling 142.00 points Monday. The Tokyo market was closed Tuesday for a national holiday.

Meanwhile, the Topix index of all TSE first section issues closed down 0.72 point, or 0.04 percent, at 1,718.92, following a 12.50-point drop the previous trading day.

The Nikkei average’s rise reflected a jump in the stock price of Softbank Group, a heavyweight component of the key indicator, in response to a U.S. federal district court approval of the planned merger of T-Mobile U.S. Inc. and Sprint Corp., brokers said. Sprint is a Softbank Group unit.

Active buying of semiconductor-linked stocks also supported the Nikkei average throughout the day as well, they added.

On the other hand, deep-rooted concerns over the spreading coronavirus outbreak sent the Topix index into negative territory in the early morning, where it remained for the rest of the day, the brokers said.

In the afternoon, both indexes fluctuated within a narrow range due to a dearth of fresh trading incentives.

“Softbank Group alone pushed the Nikkei up by around ¥150 (at one point),” said Yutaka Miura, senior technical analyst at Mizuho Securities Co.

The market as a whole was weighed down by concerns over COVID-19, especially because the health ministry announced Wednesday that a quarantine officer who worked on the Diamond Princess cruise ship, quarantined off Japan, tested positive for the virus, he said.

He added that investors refrained from active trading in the afternoon to wait to see U.S. market developments later Wednesday.

Maki Sawada, vice president of Nomura Securities Co.’s Investment Research & Investor Services Department, said the Tokyo market is expected to be “top-heavy” until the impact of the coronavirus outbreak on the economy becomes clear.

On the TSE’s first section, falling issues outnumbered rising ones 1,275 to 796 while 88 issues were unchanged. Volume increased to 1.395 billion shares from Monday’s 1.161 billion shares.

Softbank Group jumped 11.89 percent.

Semiconductor-related issues, including Tokyo Electron and Advantest Corp, attracted buying, after the tech-heavy U.S. Nasdaq index rewrote its all-time closing high and the SOX Philadelphia semiconductor index advanced Tuesday.

Sanyo Shokai rose 9.61 percent following a Bloomberg report Wednesday that a U.S. activist investor urged the apparel maker to sell itself.

Among other major winners were security firm Secom Co. and consumer lender Aiful Corp.

On the other hand, MonotaRO Co. dropped 4.18 percent as market players were disappointed with the tool shopping website operator’s January sales announced Monday.

In index futures trading on the Osaka Exchange, the key March contract on the Nikkei average rose 230 points to end at 23,870.

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Nikkei closes higher, helped by SoftBank’s rise

Nikkei closes higher, helped by SoftBank’s rise … tracking higher overnight and heavyweight SoftBank Group’s advance underpinning the market.
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TOKYO, Feb. 12 (Xinhua) — The benchmark Nikkei stock index closed higher Wednesday, helped by U.S. shares tracking higher overnight and heavyweight SoftBank Group’s advance underpinning the market.

The 225-issue Nikkei Stock Average added 175.23 points, or 0.74 percent, from Monday to close the day at 23,861.21.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, meanwhile, shed 0.72 point, or 0.04 percent, at 1,718.92.

Information and communication, and electric appliance issues led notable gainers, while electric power and gas and construction sectors comprised those that declined the most by the close of play.

Markets here were closed on Tuesday for a national holiday.

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SoftBank Group Q3: Profit falls 99%; misses analyst estimates

apan’s SoftBank Group Corp said on Wednesday its third-quarter operating profit fell 99%, well short of analyst estimates, pulled down by losses at the …

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SoftBank Group’s quarterly profit wiped out by Vision Fund losses

Japan’s SoftBank Group Corp said on Wednesday its third-quarter operating profit fell 99%, well short of analyst estimates, pulled down by a second …

Quarterly profit at SoftBank Group Corp was almost wiped out as the Japanese technology giant was hit for a second straight quarter by losses at its $100 billion Vision Fund.

Wednesday’s dismal results could further dampen investor enthusiasm for founder Masayoshi Son’s big bets on untested start-ups. While Son told a news conference SoftBank had turned a corner, he also said he has been forced to scale back a second Vision Fund while investing with only SoftBank’s own capital.

That marks a major climbdown from July, when SoftBank said it had attracted $108 billion in pledges for a second mega-fund.

More pointedly, it shows how the bailout of start-up WeWork last year and other missteps have put a chill on the tech investing scene and given SoftBank shareholder Elliott ammunition to lobby for change.

“We have caused a lot of concern,” Son said in Tokyo following the results, adding he needs to “give everyone piece of mind” to secure outside funds for Vision Fund 2.

Group profit was 2.6 billion yen ($24 million) in the October-December quarter versus 438 billion yen a year before. The Vision Fund posted an operating loss of 225 billion yen ($2.05 billion) for the quarter compared with a 176 billion yen profit in the same period a year earlier.

But Son, known for an ebullience and charisma that is still rare in corporate Japan, said the company’s performance was already improving.

“The tide is turning,” he said.

Big stake

“Softbank should focus on one thing, shareholder value creation,” said Jeffries analyst Atul Goyal in a note to clients ahead of the earnings.

Son pointed to a rally in prices at the Vision Fund’s handful of listed investments and news overnight that a U.S. federal judge had rejected an antitrust challenge to the proposed merger of SoftBank’s Sprint Corp and T-Mobile US Inc.

Shares of SoftBank finished up 12% in Tokyo before the results and after the U.S. court decision.

Son has long argued SoftBank’s shares are undervalued, a position shared by U.S. hedge fund Elliott Management, which has recently emerged as a prominent shareholder. Elliott, one of the world’s best known activist investors, is pushing for changes including $20 billion in stock buybacks, sources said last week.

SoftBank has held discussions with Elliott and is aligned on improving shareholder value, Son said, adding that while open to potentially buying back shares, he was in “no hurry” to sell part of a 26% shareholding in Alibaba to fund buybacks.

The Vision Fund, which is backed by Saudi Arabia and has single-handedly changed the face of tech investing, said it had invested $74.6 billion in 88 companies as at the end of December, when those investments were worth $79.8 billion.

Analysts have said it is difficult to evaluate SoftBank’s performance due to a lack of disclosure around Vision Fund’s internal valuations.

Son’s investing credentials took a hit in the August-September quarter when the Vision Fund recorded an $8.9 billion operating loss.

Since then, a slew of portfolio companies – from hotel-booking platform Oyo to cloud robotics firm CloudMinds – have cut jobs and come under pressure to demonstrate the long-term viability of their business models.

The fund itself has also lost key employees.

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SoftBank’s profit drop amid WeWork worries, Sprint approval

TOKYO – Japanese technology conglomerate SoftBank Group Corp. said its profit for last quarter dropped amid worries about the perceived risk of its …

TOKYO – Japanese technology conglomerate SoftBank Group Corp. said its profit for the last quarter dropped amid worries about the perceived risk of its investments into companies like WeWork.

Tokyo-based SoftBank said Wednesday its profit for the October-December quarter stood at 55 billion yen ($500 million), down to less than a tenth of the 698 billion it earned over the three months in 2018.

In a bit of good news, a U.S. judge in New York on Tuesday rejected a challenge by a group of states to T-Mobile’s $26.5 billion takeover of Sprint. SoftBank owns Sprint.

The deal has been two years in the making, and the latest development appears to clear nearly all the hurdles. The agreement already has U.S. regulatory approval and the go-ahead from public utility commissions. T-Mobile now expects to close the deal as early as April 1.

The good news sent SoftBank shares soaring in Tokyo trading.

SoftBank, which includes in its group a successful Japanese mobile carrier, reported quarterly sales edged down 3% to 2.44 trillion yen ($22 billion).

Losses at SoftBank’s investment fund called the Vision Fund also hurt results , although such losses have been decreasing.

The reputation of the Vision Fund, which was started mostly with Saudi money, suffered in 2018, after the killing of Saudi journalist Jamal Khashoggi. The fund has been investing in various companies, solar projects and artificial intelligence.

Adding to the company’s challenges has been SoftBank’s bailout of WeWork last year. That invited scrutiny after WeWork, which bills itself as both a technology and real-estate company, canceled an initial public offering.

SoftBank brought in new leadership at WeWork to try to engineer a turnaround. The company says it’s banking on the huge potential of workspace sharing around the world, and has secured enough cash to move forward.

SoftBank has powerful companies under its wing, including Alibaba, a Chinese e-commerce, retail and net conglomerate, Yahoo! Japan and the British IOT company Arm.

SoftBank’s founder and Chief Executive Masayoshi Son has managed to score success by jumping from what he sees as one lucrative venture to another, a business style that’s common in the West but relatively rare in conservative Japan Inc.

“I see comments out there that SoftBank even might go bankrupt. But we are in the black. It is a far cry from bankruptcy,” he told reporters and analysts at a Tokyo hotel, noting shareholders’ value had increased by 5 trillion yen ($45 billion) in the past four months.

Son showed a trompe-l’œil image that looks like a duck from the right but a rabbit when looked at from the left, while acknowledging he was making “a pretty outlandish argument” to have people focus on shareholders’ value, not profits.

Among SoftBank’s sprawling businesses are ride-sharing Uber and the talking Pepper humanoid.

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Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama

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