Sharp Rallies 58% as MSCI Index, Foxconn Deal Fuel Gainsby
Stock climbs for the fourth straight trading session
Foxconn Technology Group makes capital investment for control
Sharp Corp. shares have jumped 58 percent in the past week, fueled by news that the stock will be added to MSCI indexes and bolstered by Foxconn Technology Group’s completion of a deal to take control of the Japanese electronics maker.
The stock rose for the fourth straight session, climbing 17 percent to 141 yen in Tokyo. Sharp will join the indexes compiled by MSCI Inc. from Friday. The gauges are often used by funds and other institutional investors, which can boost the purchase of shares when they are selected by the investment research firm.
“Getting added to the index is a positive for the shares because this would allow funds that track it to add Sharp to their portfolios,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “How far the rally will extend depends on the details of how Foxconn plans to rebuild Sharp.”
Sharp agreed to a rescue package from Foxconn earlier this year, ending a takeover battle that spanned four years. President Kozo Takahashi will be replaced by Foxconn’s Tai Jeng Wu. Sharp’s liabilities no longer exceed assets after the 289 billion yen infusion, the company said. While Foxconn and Sharp agreed to the deal in April, it wasn’t until last week that antitrust authorities in China cleared the acquisition.
While the stock has surged this past week, it’s still less than half its highs in 2014.