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Japanese Shares Advance on Shipping Lines, Olympic Stocks

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Sept. 10 (Bloomberg) -- Japan shares rose, with the Topix index extending a one-month high amid turnover double the average, as Olympics-related stocks surged a second day and shippers advanced after cargo rates jumped.

Building contractor Taisei Corp. led gains on the Nikkei 225 Stock Average for a second day after Tokyo won its bid to host the 2020 Olympics. Mitsui O.S.K. Lines Ltd. climbed 6 percent after the Baltic Dry Index, a measure of commodity-shipping prices, posted its biggest advance in more than four years. Komatsu Ltd. jumped 6.4 percent on a report operating profit from its parts business will rise to a record.

The Topix gained 1.5 percent to 1,190.22 at the close of trading in Tokyo, its highest level since Aug. 6. All but one of the 33 subsectors advanced, with volume about twice the 30-day average. The Nikkei 225 added 1.5 percent to 14,423.36.

“There’s still a lot of celebration over the Olympics win,” said Akio Yoshino, chief economist in Tokyo at Amundi Japan Ltd., which oversees about 3.3 trillion yen ($33 billion). “It’s been a long time since we’ve had good news, after shares began correcting in May and investors began feeling the Abenomics bubble had burst. The market is holding on to this pillar of support.”

Futures on the Standard & Poor’s 500 Index climbed 0.1 percent today. The measure gained 1 percent in New York yesterday to close at its highest since Aug. 14, as corporate acquisitions including Koch Industries Inc.’s takeover of Molex Inc. fueled optimism. About $160 billion of mergers and acquisitions have been announced in the U.S. since the end of August, the most since 2007, data compiled by Bloomberg show.

Olympics Win

Japanese shares rallied yesterday after Tokyo outpolled Istanbul 60-36 in a runoff vote among members of the International Olympic Committee meeting in Buenos Aires over the weekend. Developers and construction companies led gains among the Topix groups, while tourism shares and sportswear makers also advanced.

The government will consider adding to departure and landing slots at Tokyo’s Narita and Haneda airports to accommodate the increase in visitors to Japan during the games, the Nikkei newspaper reported today, citing unnamed officials.

Airport Facilities Co. surged 19 percent to 945 yen for its biggest gain since listing in 1995. Japan Airport Terminal Co. jumped 6.5 percent to 2,126 yen. ANA Holdings Inc., the nation’s biggest carrier, gained 3.8 percent to 220 yen. Japan Airlines Co., the No. 2, rose 3.2 percent to 5,520 yen.

Honyaku Center Inc., which provides translation services, surged 16 percent to 4,955 yen, its highest level since July 2006, after yesterday soaring almost 20 percent.

Builders Advance

The Topix Construction Index climbed the most among the groups for a second day, jumping 5.1 percent to its highest level since 2007. Taisei surged 13 percent to 524 yen, its highest close since 2006, after adding 13 percent yesterday. Kajima Corp., another builder, leapt 7.8 percent to 427 yen.

Taiheiyo Cement Corp., Japan’s biggest maker of construction materials by market value, added 6.2 percent to 414 yen, its highest level since 2007. Sumitomo Osaka Cement Co., the No. 2, climbed 5.4 percent to 408 yen.

A gauge tracking developers added 1.8 percent today, extending yesterday’s 5.3 percent jump. Shares in the subsector trade at about 37 times estimated earnings and 2.58 times book value, compared with about 15 times estimated profits and 1.24 times the value of assets for the broader Topix.

“Many of the obvious Olympics-related stocks are starting to get expensive,” said Amundi’s Yoshino. “I would begin to look at taking profits. I would then look for shares that differ from those everyone is targeting now, such as machinery and precision-instrument makers that have solid earnings.”

Shippers Climb

Shipping lines also advanced, with the Topix Marine Transportation Index rising 4.6 percent to its highest since 2011. The Baltic Dry Index, which investors use to gauge supply and demand trends, surged 9.3 percent in London yesterday, capping a sixth straight advance, as strengthening steel prices in China spurred imports of iron ore used to make the metal.

Mitsui O.S.K., Japan’s second-largest shipper, gained 6 percent to 458 yen, its highest level since May 2011. Nippon Yusen K.K., the sector leader, rose 3.6 percent to 318 yen and Kawasaki Kisen Kaisha Ltd. added 3.7 percent to 251 yen.

Among other shares that rose, Komatsu jumped 6.4 percent to 2,428 yen, the most since September 2012. The company expects operating profit from its parts business to surge 40 percent to a record 120 billion yen in the year ending March on continuing price increases and a weakening yen, the Nikkei newspaper reported without naming anybody.

Yakult Honsha Co. surged 7.2 percent to 4,625 yen after the beverage maker announced plans to replace its current Yakult-branded drink with a more expensive version.

About 4.2 billion shares changed hands on the the first section of the Tokyo Stock Exchange today, the most since June 7 when 4.4 billion shares were traded, Bloomberg data show. The value of shares traded reached 2.4 trillion yen today, after yesterday rising above 2 trillion yen for the first time since August 2, the data show. The Topix’s 30-day historic volatility was at 25.03 today, compared with its five-year median of 19.42.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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