Mitsui Posts Record Decline After Swiss Probe, Glencore Rout

  • Shares in Tokyo decline 9.6%, biggest drop since 2008
  • Swiss regulators name Mitsui unit in metals investigation

Mitsui & Co., Japan’s second-biggest trading house, fell the most in almost seven years after being named in a metal-trading probe.

The shares declined 138.5 yen, or 9.6 percent, to 1,312 yen in Tokyo trading, the biggest one-day drop since December 2008.

Switzerland’s competition regulator identified a unit of Mitsui and six banks on Monday as part of a probe into whether they colluded to manipulate the prices of gold, silver and other precious metals.

“The risk of Mitsui receiving fines in the future has increased,’’ Fumio Matsumoto, a fund manager at Dalton Capital Japan Inc. in Tokyo, said by phone. “While the penalties likely won’t be as large as those paid for the Libor scandal, the increased risk of paying future reparations has caused a selloff of the stock.’’

Mitsui is currently checking whether it or its subsidiaries are the target of the Swiss investigation, according to a spokesman, who asked not to be identified citing company policy.

Also casting a pall over Mitsui is Glencore Plc, the commodities and mining company that is emerging as the most prominent casualty of the bust in commodities markets. Glencore’s stock plunged as much as 31 percent in Hong Kong on Tuesday after a similar tumble in London on Monday as concern mounted about the commodity trader’s debt load.

“The impact of Glencore’s drop on the market and Mitsui’s recent inclusion in the Swiss probe are negatively affecting the stock,” Akira Morimoto, an analyst at SMBC Nikko Securities Inc., said by phone.

Mitsui, the most reliant of Japan’s traders on commodities and energy, forecasts gross profit will fall 13 percent this fiscal year due to the decline in crude oil and iron ore prices, the company said in May. Crude oil has dropped 51 percent in the last year, while iron ore has slid 27 percent.

Before it's here, it's on the Bloomberg Terminal.