Acom Co. (8572) shares tumbled the most in three years, leading a slump in Japanese consumer lenders after Financial Services Minister Taro Aso said the government doesn’t have immediate plans to relax industry rules.
Acom, the country’s biggest consumer lender, slid 11 percent, the most since March 2011, to close at 348 yen in Tokyo. Aiful Corp. (8515) lost 13 percent, the most since May 2013, as Japanese markets resumed trading after a holiday yesterday.
A 2006 legislative change designed to protect consumers “was pretty effective to deal with heavily indebted people,” Aso said in parliament on April 28. “At this point in time, the government has no intention to change the regulations.”
His remarks came after fellow Liberal Democratic Party lawmaker Masaaki Taira said last week the LDP will form a panel next month to examine whether to loosen legislation to give borrowers more options to obtain credit. Shares of companies from Tokyo-based Acom to Kyoto-based Aiful surged more than 11 percent last week on speculation that any easing of the laws would spur profit.
“Aso’s comment is clearly pushing non-bank stocks down,” Masamitsu Ohki, a portfolio manager at Fivestar Asset Management Co. in Tokyo, said by phone today. “This is a polarizing issue within the LDP, but it’s still positive for the industry that they’re starting to seriously consider easing regulations.”
Japan should consider scrapping rules that limit credit to a third of a borrower’s income and raising a cap on interest rates to 29.2 percent from 20 percent to encourage lending, Taira said in an April 24 interview. The law became fully effective in 2010 as part of a crackdown on coercive lending.
The LDP pledged to ease the regulations in its successful election campaign in 2012, saying the rules led the consumer-loan market to shrink and drove some lending underground to illegal outlets.
Credit Suisse Group AG analyst Takehito Yamanaka cut his rating on Acom shares to neutral from outperform on April 28, saying the recent jump in shares stemming from reports on the LDP’s plans was overdone. Acom is partly owned by Mitsubishi UFJ Financial Group Inc., Japan’s biggest bank.
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