Price-war threat hits Jap mobile firms
THE BATTLE for market share among Japanese mobile phone firms has never been more intense. But investors are not pleased about where some of the schemes designed to attract and keep customers may be heading.
As far as they are concerned, the most damaging trend is the threat of flat-rate plans. The news that dominant player NTT DoCoMo may follow KDDI's lead in the introduction of flat rates for data communication has led to fears of a price war, which could be about to erode earnings and force a complete rethink of business models.
Investors did not like that yesterday and, after sleeping on it, felt no better about it today. DoCoMo shares fell 4.74% to 221,000 yen, adding to a 2% fall yesterday, and KDDI dropped another 3.72% to 543,000 yen.
There was also disquiet in the technology sector, taking a cue from Wall Street, and leading to a fall across the board. The Nikkei 225 Average closed down 224.83 points at 10,644.13, wiping out its 1.4% gain the previous session.
Chipmaker NEC was one of the big losers, shedding 4.45% to 773 yen, while Toshiba was down 3.3% at 441 yen.
Despite this, internet portal Yahoo! Japan rose 3.43% to 2.11m yen on record advertising sales and the prospect of a two-for-one share split.
In Hong Kong, stocks opened flat but later managed small gains. The Hang Seng was up 42.44 points at 13,807.51, but traders reported a lack of confidence as Wall Street's slide and the uncertainty of the direction of the US dollar weighed on sentiment.
News of the US$1.59bn (£850m) share offering of China's biggest chipmaker, Semiconductor Manufacturing International, attracted attention to the sector with smaller rival China Resources Logic rising 3.17% to HK$1.30
Exporter Li & Fung, up 3% to HK$15.25, and fashion retailer Esprit, ahead 2.6% to HK$31.60, were among the biggest gainers.
Singapore was given a vote of confidence by Merrill Lynch, which said it would use the city as a hub to tap into the fast-growing Asian wealth management market.
The firm plans to beef up its presence and use the city as a base to support its China operations. But shares still opened lower, with technology stocks hit by overnight falls on the Nasdaq. The Straits Times index fell 2.52 points to 1882.01.
Chartered Semiconductor Manufacturing and its associate ST Assembly Test Services both fell, the former by 1.75% to S$1.68 and th latter by 1.6% to S$1.85.
DBS Bank, still in the doghouse after disappointing earnings results last week, fell 0.66% to S$15.10.
In Sydney, Wall Street also cast a shadow over Australian stocks, with the All Ordinaries falling 10.10 points to 3344.2.
Softening commodities prices took their toll on miners. BHP Billiton was down 0.9% at A$12.15 and Rio Tinto lost 1.1% to A$35.70.
Once again, the focus was on gambling stocks with poker- machine maker Aristocrat rising more than 20% to A$2.41 after reporting a smaller-than-expected first-half loss.
Gambling operators Tabcorp and TAB Limited returned to trading after a halt for the announcement of a A$2bn (£826m) bid by Tabcorp for TAB. Investors saw it as a positive for TAB, pushing it up 0.44% to A$4.54, while Tabcorp eased 0.17% to A$11.97.
