Oji Paper Co., Japan's largest papermaker, lead paper stocks higher after Credit Suisse lifted its weighting on the industry to ``overweight'' from ``market weight'' citing growing expectations for profit expansion.
Oji Paper's stock rose 19 yen, or 2.9 percent, to 681 yen as of the close on the Tokyo Stock Exchange. The Topix Pulp and Paper Index was the second biggest gainer, up 1.6 percent, among the 33 industry groups in the benchmark.
``Investors should focus on profit growth opportunities via business alliances and streamlining efforts from fiscal 2008,'' Futoshi Usui, an industry analyst at Credit Suisse wrote in a report dated Jan. 10. Usui citied lower crude oil prices as benefiting companies' profits in the sector too. An overweight recommendation indicates Credit Suisse expects the industry to outperform the broad market benchmark over the next 12 months.
Nippon Paper Group, Japan's second biggest papermaker rose 1.1 percent to 463,000 , while the industry number four, Daio Paper Corp (3880) climbed 2.5 percent to 995 yen.
Oji Paper failed in a $1.4 billion hostile takeover attempt for Hokuetsu Paper Mills Ltd., a smaller competitor, last year after Nippon Paper and Mitsubishi Corp. (8058), Japan's largest trading company, assisted Hokuetsu in blocking the bid.
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