Tepco Shares Account for 1-in-10 Traded on Nikkei 225 in MayIain Wilson and Jason Clenfield
Tokyo Electric Power Co. accounted for about one in every 10 shares that changed hands on the Nikkei 225 Stock Average last month as trading in the operator of the wrecked Fukushima Dai-Ichi reactor soared a second month.
Monthly trading reached 6.6 billion shares, four times more than the 1.61 billion shares outstanding in the utility, according to data compiled by Bloomberg. The stock, the best performer on the Nikkei, has more than doubled this year.
Trading in the past two months in Tepco, as the company is known, is at the highest since June 2011 when the Tokyo-based utility was grappling with the scope of the Fukushima disaster, data show. The stock soared amid optimism that Japan’s Prime Minister Shinzo Abe was edging closer to allowing the restart of nuclear reactors idled after the accident.
“It’s speculation, not investment,” Gavin Parry, managing director of Hong Kong-based brokerage Parry International Trading Ltd., said in an e-mailed response to questions.
Among Nikkei-listed companies, Tepco’s volume in May was exceeded by only Mizuho Financial Group Inc. The 7.4 billion shares of Mizuho that changed hands represent about a third of shares available to trade, according to data compiled by Bloomberg.
The surge coincides with record volume last month for Japan’s five largest online brokerages as the nation’s shares rose to the highest levels since August 2008. Tepco, which is also the world’s best-performing utility stock this year, is at the center of the worst atomic disaster since Chernobyl. It has a clean-up bill estimated at $108 billion, pays no dividend and has no profit forecast.
Tepco spokesman Masateru Araki declined to comment.
Investors are buying into a company whose 11 trillion yen in estimated costs from the March 2011 Fukushima nuclear disaster, including compensation payments, are 14 times the company’s 763 billion yen ($7.8 billion) market value as of yesterday’s close in Tokyo. Combined losses at the company total 2.7 trillion yen for the past three fiscal years. Tepco gave no earnings forecast this year because it doesn’t know when or it can restart its reactors.
Japan’s Topix index is down about 17 percent from a high on May 22. Japan is still the best-performing major equity market this year, with the Topix up around 23 percent on optimism that Abe can lead the world’s third-largest economy’s emergence from 15 years of deflation.
Tepco, established in 1951, faces a changing regulatory landscape in Japan after Abe this week endorsed proposals to deregulate the electricity industry.