TOKYO -- Telecom stocks in Japan rose in light trading Monday, on hopes of a settlement between the Washington and Tokyo over interconnection rates.
Local reports said that a deal could be struck within two weeks that could see the lowering of
Nippon Telegraph & Telephone's
high interconnection rates. These sent the monopoly's shares up by nearly 6.0%, fueling the market with expectations that more competition was in store for the telecom sector.
index gained 203.61 points, or 1.2%, to 17,614.66, while the
index, which includes all shares listed on the
Tokyo Stock Exchange's
first section, rose 11.91 to 1603.51. The
small-cap index shed 0.30 to 90.05, while the Nikkei
index rose 9.71 to 1796.81.
Local reports about the possibility of NTT agreeing to cut interconnection rates, which it charges other telecom firms doing business in Japan, to 28% by the end of 2002, had the market all charged up. The deal is expected to be signed in one-to-two weeks. NTT jumped 80,000 yen, or 5.7%, to 1.49 million ($14,016), while its mobile phone unit
gained 60,000, or 2.1%, to 2.93 million.
Although a reduction of interconnection rates might eat into NTT's earnings at first, Monday's announcement by the company of increased earnings estimates for two of its units comforted investors. The market was also hoping that in addition to higher traffic thanks to lower costs, competition would guide management at NTT to adopt shareholder-friendly measures in the years to come.
rose 440, or 4.4%, to 10,340,
Matsushita Electric Industrial
gained 65, or 2.4%, to 2815, and
jumped 35, or 2.9%, to 1232. The three firms said they would jointly set up a satellite TV venture to enter the quickening cable race.
As the U.S. markets take a break Tuesday for the July 4th national holiday, investors in Japan will be awaiting the
Bank of Japan's tankan
survey of corporate sentiment. The survey, which is often regarded as a better indicator of Japan's economic fortunes than some major macro statistics, is expected to show that companies think the economy is improving, and therefore indicate that they will boost spending.
Although the market expects a good reading on the tankan, currency dealers were hesitant to take any major positions ahead of the actual release and before the U.S. market holiday. The greenback edged slightly higher to fetch 106.30 yen.
index dropped 30.81 points to 16,124.97, with profit taking hitting index heavyweight
, formerly known as China Telecom. Shares closed down HK$1.25, or 1.8%, to 67.50 ($8.66).
Property shares fared well.
rose 1.25, or 1.5%, to 87.50, while
Sun Hung Kai Properties
gained 0.50 to 56.50. Investor enthusiasm may have stemmed from the government's statement late Friday that it had abandoned its target of building 85,000 new apartments per year, given slack demand at current prices and high real interest rates.
Cable & Wireless HKT
returned to active trading after shareholders approved the firm's takeover by
Pacific Century CyberWorks
. PCCW fell 0.10 to 15.30 while HKT fell 0.20 or 1.2% to 16.95. Now only a court's approval is needed to complete the deal.
Elsewhere in Asia, Korea's
index rose 13.99, or 1.7%, to 835.21, while Taiwan's
index rose 32.68 to 8297.77.