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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Google challenges €2.4bn antitrust fine in court / SoftBank Group posts Q3 earnings / European …

Good morning, here’s your Wednesday morning briefing. Look out for these three things happening around the world today.

Good morning, here’s your Wednesday morning briefing. Look out for these three things happening around the world today.

Google challenges €2.42bn antitrust fine in court hearing

A three-day hearing gets underway for Google’s challenge of a €2.42bn antitrust fine issued by the European Commission in 2017.

Three years ago the commission said the search engine giant was guilty of using its market dominance to predominantly display Google Shopping results.

While Google is complying in part, it argues that the EU did not show enough evidence that proved Google Shopping hurt rivals.

Google has since been stung by two more EU anti-trust fines. In 2018 it was fined a record €4.3bn for abusing its market dominance in mobile. In 2019 it was hit with a €1.5bn antitrust fine for abusing its dominant position in online search advertising.

SoftBank Group posts Q3 earnings

Japan’s SoftBank Group is due to post its third-quarter results for the fiscal year ending 31 March 2020.

The multinational conglomerate, which is known for investing in technology firms via its Vision Fund, publishes its results as this newsletter goes live, between 7am and 8:30am GMT. A livestream of the conference call can be viewed here.

SoftBank is a majority shareholder in embattled office sharing group WeWork. Following WeWork’s disastrous IPO last August, SoftBank was forced to bail out the startup with a $9.5bn cash injection.

The Tokyo Stock Exchange-listed firm reported its first quarterly loss in 14 years in July-September 2019.

European Information Security Summit

The European Information Security Summit gets underway in London, UK.

Organised by cybersecurity publication teiss, the two-day event will see over 100 speakers from around the world take part in panel sessions, roundtables and workshops.

The focus this year is on the key themes and challenges faced by CISOs, CIOs, CTOs and heads of information security.

3 Things That Will Change the World Today

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Speakers include the CISO of Penguin Random House UK, the chief security officer at Network Rail and a Google cloud specialist.

Monday’s Highlights


MWC coronavirus cancellations: The companies that have withdrawn so far

On Safer Internet Day, online incivility is at a four-year high

Impala raises $20m to expand hotel API platform

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