Tech Investor SoftBank Sharply Higher on Lower Japanese Stock Market

SoftBank shares rose sharply on the Tokyo stock exchange on Tuesday. The Japanese tech investor reported disappointing quarterly figures, but at the same time announced a major share buyback program to prop up the share price.

 

SoftBank struggled last quarter with the stricter approach to tech companies by the Chinese government. As a result, VisionFund, with which SoftBank invests in Chinese companies such as taxi app Didi Global and online store Alibaba, suffered a record loss.

SoftBank added 10.5 percent. The company will buy 1 trillion yen, converted about 7.6 billion euros, in its own shares. It is the company’s second-largest procurement program ever. SoftBank will buy back almost 15 percent of the outstanding shares. The share buyback increases the earnings per share of the incumbent shareholders, increasing the price and dividend.

Despite strong gains from SoftBank, a heavyweight on the Japanese stock market, Tokyo’s leading Nikkei closed 0.8 percent lower at 29,285.46 points. Investors were concerned about the economic recovery of the Japanese economy, which is less strong than in the United States, for example. Fujikura was among the strongest declines in the Nikkei, with a loss of 6 percent after disappointing results from the electrical equipment manufacturer.

Toshiba fell more than 2 percent. The Japanese technology group is considering splitting into three companies to create more value for shareholders. The individual companies would then focus on infrastructure, devices and memory chips, respectively. Business newspaper Nikkei previously reported that Toshiba aims to split up by 2023. However, Toshiba itself said that no final decisions had been made yet.

The other stock markets in the Asian region showed a mixed picture. Investors were especially looking forward to US producer prices coming out later in the day. The main index in Shanghai was up 0.3 percent in the meantime, and the Hang Seng index in Hong Kong gained a fraction. On the other hand, the Kospi in Seoul fell 0.2 percent and the All Ordinaries in Sydney lost 0.2 percent.

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