Kobe Steel Ltd., Japan’s third-biggest steelmaker, jumped 19 percent in Tokyo trading, leading domestic rivals higher and extending yesterday’s gain after saying it planned to sell its voting right stake in hydraulic equipment maker Nabtesco Corp.
Kobe Steel closed up 28 yen to 176 yen on the Tokyo Stock Exchange, its biggest gain since Oct. 14, 2008. Nippon Steel & Sumitomo Metal Corp. rose 5.8 percent to 293 yen, while JFE Holdings Inc. climbed 8 percent to 2,510 yen. The Topix Iron & Steel Index was the biggest gainer by industry groups.
Kobe Steel plans to cut the holding in Tokyo-based Nabtesco to zero from 11.8 percent with the price to be set as early as May 27, Nabtesco said on May 17. Kobe Steel could book a 38 billion yen ($370 million) extraordinary gain in the year to March 31, Jefferies Japan Ltd. analyst Thanh Ha Pham, said in a report. Kobe in the 12 months ending March 31 is targeting its first annual profit in three years by paring labor and materials costs and selling assets.
The share gains among Japanese steel companies also reflect a broader move by foreign investors to buy laggard stocks as the industry has underperformed the benchmark Nikkei 225 Stock Average, said Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Nippon Steel & Sumitomo, Japan’s biggest steelmaker, has risen 18 percent in the past three months, lagging the 36 percent increase for the Nikkei 225 index.