Nikkei rises; Renesas, Sharp jump but Daikin sags

Tue Aug 28, 2012 10:48pm EDT

* Renesas jumps after sources say KKR to invest $1.27 bln
    * Daikin fall, sources say to buy U.S. rival for $3.8 bln
    * Sharp rebounds, company to cut 2,000 jobs in Japan

    By Dominic Lau
    TOKYO, Aug 29 (Reuters) - Japanese shares edged higher on
Wednesday, with Renesas Electronics Corp surging 31
percent after sources said U.S. private equity fund KKR & Co
 plans to invest around $1.27 billion in the struggling
chipmaker. 
    But Daikin Industries Ltd, the world's
second-largest air-conditioner maker, sagged 5.2 percent after
sources said it would buy U.S. rival Goodman Global Inc for
about $3.8 billion. 
    The Nikkei average added 0.3 percent to 9,058.99,
still below its five-day moving average at 9,085.31.
    Trading in the Nikkei has been relatively subdued in the
past week after a recent rise and as investors await U.S.
Federal Reserve Chairman Ben Bernanke's speech on Friday for any
hints of further stimulus measures.
    "Anticipation ahead of Bernanke's speech on Friday is the
number one story right now," said Stefan Worrall, director of
equity cash sales at Credit Suisse in Tokyo.
    Buoyed by expectations of a quick fix by the European
Central Bank to bring down high borrowing costs for Spain and
Italy, and of more stimulus from the Fed, investors have pushed
the Nikkei up 8.8 percent since it hit a seven-week low on July
25. The index is up 7.1 percent so far this year.
    Investors could be disappointed if Bernanke does not give a
clearer signal of a new round of a bond-buying programme.
    But Masahide Tanaka, deputy general manager of the asset
management business planning department at Mizuho Trust &
Banking Co Ltd, said the dollar was likely to strength against
the yen if the Fed did not launch another round of quantitative
easing, and Japanese exporters would benefit from a weaker yen.
    "That will support the Japanese Nikkei market," he said.  
    Helped by recent gains, Japanese equities' 12-month forward
price-to-book ratio recovers to 0.85, a level not seen since
mid-July, according to Thomson Reuters Datastream.
    The broader Topix index rose 0.4 percent to 749.60
on Wednesday. Trading volume after the morning session was
relatively light, at 45 percent of its full daily average for
the past 90 days.
    Renesas, the world's fifth-largest chipmaker, jumped to a
seven-week high on the news of KKR's proposed investment. The
Japanese firm is implementing a restructuring plan that would
lay off 12 percent of its workforce and sell or consolidate half
of its domestic plants. 
    Other gainers included embattled TV maker Sharp Corp
, which climbed 9.3 percent after it said it would offer
severance packages to as many as 2,000 workers in Japan as part
of a plan to lay off one-tenth of its global workforce in a bid
to reduce costs. 
    Short-sellers have been covering their bearish bets on Sharp
lately as the company is likely to survive with Taiwan's Hon Hai
Precision Industry going ahead to take a stake in the
Japanese firm.
    According to data provider Markit, 87.63 percent of Sharp
shares available to be borrowed had been out on loan as of Aug.
27, down from 92.21 percent on Aug. 22.
    Sharp's shares have risen 30 percent since Aug. 22, although
it is still down 65 percent this year.