Japan Stocks Climb; Yamada Denki Gains on Retail Consolidation

Sept. 26 (Bloomberg) -- Japan's stocks advanced, led by retailers, after Yamada Denki Co. said it will acquire smaller rival Kimuraya Select Co. and boosted its stake in Best Denki Co., increasing speculation that consolidation in the industry will continue.

The Nikkei 225 Stock Average gained 34.45, or 0.2 percent to 16,436.18 as of 10:09 a.m. in Tokyo. The broader Topix index added 8.96, or 0.6 percent, to 1,575.79.

Inpex Holdings Inc., Japan's biggest oil explorer, led declines by oil-related companies after the price of crude dropped below $80 per barrel.

Sony Corp. paced losses by some exporters after the U.S. retail market showed signs of weakening, increasing concern profit will be curbed.

Yamada Denki, the country's largest electronics retail chain, jumped 450 yen, or 4.4 percent, to 10,700. Best Denki, a Fukuoka- based retailer, rose 80, or 9.8 percent to 899. Bic Camera Inc., an electronics retailer, dropped 100 yen, or 0.2 percent, to 59,900.

Yamada Denki said yesterday it will make Kimuraya Select, a discount electronics chain with stores in the Tokyo region, a subsidiary. The acquisition will cost the company as much as 6 billion yen ($52.3 million), the Nikkei newspaper reported.

Yamada also boosted its stake in Best Denki to 7.71 percent from 6.47 percent according to a regulatory filing. Yamada hopes to increase its stake in the company to about 20 percent, the Nikkei reported on Sept. 22. Best Denki plans to resist any takeover attempt, according to the Nikkei.

Domestic Consolidation?

The move came after Bic Camera said on Sept. 20 it would pay 5.7 billion yen for new shares in Best Denki, giving it a 9.33 percent stake in the retailer. Yamada Denki has said in the past it is determined to retain the top spot among electronics retailers.

Other retailers also advanced. J Front Retailing Co., which was formed this month by the merger of Daimaru Inc. and Matsuzakaya Holdings Co., climbed 21 yen, or 2.1 percent, to 1,025. Seven & I Holdings Co., the nation's largest retailer by sales, rose 70 yen, or 2.5 percent, to 2,895.

Inpex slumped 50,000 yen, or 4.2 percent, to 1.15 million. Japan Petroleum Exploration Co., the nation's second-largest oil explorer, fell 110 yen, or 1.3 percent, to 8,190.

Crude oil for November delivery fell 1.8 percent to $79.53 per barrel yesterday in New York, the first time to finish below $80 since Sept. 14.

Sony, which generates about 70 percent of its sales outside Japan, slipped 30 yen, or 0.6 percent, to 5,310. Nissan Motor Co., Japan's third-largest automaker, lost 4 yen, or 0.4 percent, to 1,128.

U.S. Retailers

Target Co., the second-largest U.S. discount chain, said yesterday same-store sales will increase 1.5 percent to 2.5 percent for the five weeks through Oct. 6, versus a previous forecast for an increase of up to 6 percent.

Lowe's Cos., the second-biggest home improvement chain, said its profit this year will be at the low end of a previous forecast, sending its shares tumbling 6.1 percent.

Elsewhere, an index of U.S. consumer confidence fell more than forecast in September, to 99.8 from 105.6 and sales of previously owned homes dropped 4.3 percent in August to the slowest annual pace since 2002 and a separate index of home values fell the most in at least six years in July.

Hino Motors Ltd. rose 28 yen, or 3.2 percent, to 902. Japan's biggest maker of heavy-duty trucks raised its net income forecast for the six months through September by 16 percent, to 11 billion yen, on higher overseas sales.

Mizuho Financial Group Inc., Japan's second-largest bank, surged 19,000 yen, or 3.1 percent, to 640,000. Sumitomo Mitsui Financial Group Inc., the third biggest, rose 18,000, or 2.2 percent, to 830,000.

The amount of money invested in mutual funds at the nation's three biggest banks rose 3 percent last month as individuals continue to seek higher returns on their assets, according to the Nikkei newspaper.

Nikkei futures expiring in December rose 0.2 percent to 16,460 in Osaka and lost 0.1 percent to 16,440 in Singapore.

In other Asian markets open for trading, Australia's S&P/ASX 200 Index was little changed. Taiwan's Taiex Index gained 0.8 percent. South Korean markets are closed for a holiday.