A signboard of Japan Display is seen at its factory in Mobara, Tokyo. The world’s biggest maker of screens for tablets and smartphones will sell 140mn new shares at ¥900 to ¥1,100 apiece in an IPO.

AFP/Tokyo

Asian markets mostly fell yesterday as growing fears of a conflict between Ukraine and Russia sent traders scurrying for safer assets, with the yen surging and oil prices also seeing big gains.

The downbeat atmosphere was compounded in some markets by another disappointing set of manufacturing figures from China that added to concerns about growth in the world’s number two economy.

Tokyo shed 1.27%, or 188.84 points, to 14,652.23, Sydney fell 0.38%, or 20.5 points, to 5,384.3 and Seoul lost 0.77%, or 15.30 points, to end at 1,964.69.

Hong Kong tumbled 1.47%, or 336.29 points to 22,500.67.

However, Shanghai rose 0.92%, or 18.93 points, to 2,075.23 as investors brushed off the weak manufacturing figures ahead of Beijing’s annual policy gathering later in the week.

The long-running political crisis in Ukraine took another turn on Saturday when lawmakers in Moscow voted to allow President Vladimir Putin to send troops into Crimea, a mainly Russian-speaking peninsula in the southeast of the ex-Soviet state.

In what has become the most serious crisis since the end of the Cold War, global leaders condemned the move as Ukraine’s new Western-backed prime minister Arseniy Yatsenyuk warned: “We are on the brink of a disaster.”

US President Barack Obama branded the move a “violation of Ukrainian sovereignty”, while Secretary of State John Kerry warned Moscow faced being kicked out of the Group of Eight economic grouping if it did not step back.

Atsushi Hirano, head of FX sales Japan at Royal Bank of Scotland, told Dow Jones Newswires: “Tensions have risen with the US. Stocks are likely to be negatively affected.”

The tensions sent investors scurrying to the yen, which is considered a safe bet in times of political and economic uncertainty. In afternoon trade the dollar was at 101.33 yen, compared with 101.76 yen in New York Friday afternoon, while the euro fetched 139.51 yen against 140.44 yen.

The euro bought $1.3777 against $1.3800.

With Russia also a huge supplier of oil to European nations, the price of both main crude contracts also spiked.

New York’s main contract, West Texas Intermediate for April delivery, gained $1.72 to $104.31 in afternoon trade, and Brent North Sea crude for April jumped $2.14 to $111.21.

There were renewed worries about the health of China’s economy after Beijing said its official purchasing managers’ index (PMI) of manufacturing activity fell to an eight-month low of 50.2 last month.

The figure represents the third straight drop following a reading of 50.5 in January, 51.0 in December and 51.4 in November.  A figure above 50 indicates expansion while one below shows contraction. However, officials stressed that the result was skewed by the Chinese New Year holidays at the start of the month.

Later in the day HSBC said its final PMI fell to 48.5 last month, the weakest reading since July when the figure stood at 47.7, according to the British bank.

China’s economic growth has weakened in recent years, hitting 7.7% in 2013, the lowest level since 1999. Analysts expect a further drop to 7.5% this year.

Eyes will now be on the annual National People’s Congress, which opens this week.  The event will be closely watched for the disclosure of China’s annual growth target.

Gold fetched $1,344.94 an ounce at 1045 GMT, compared with $1,329.05 late Friday.

In other markets, Bangkok added 1.05%, or 13.88 points, to 1,339.21, Jakarta dropped 0.78%, or 36.01 points, to 4,584.21, Kuala Lumpur slid 0.60%, or 10.97 points, to 1,824.69,Taipei fell 0.44%, or 37.60 points, to 8,601.98,Wellington added 0.35%, or 17.37 points, to a record high of 5,007.40, Manila closed 0.27% lower, giving up 17.47 points to 6,407.52 and Singapore lost 0.75%, or 23.31 points, to 3,087.47.

 

A man walks past electronic boards showing Nikkei average (left), Dow Jones Industrial Average (centre) and the exchange rates between the yen and the US dollar, outside a brokerage in Tokyo yesterday.

 

Japan Display, investors seek $3.8bn in IPO

Bloomberg

Tokyo

 

 

J

apan Display, a supplier of screens for Apple devices, and its owners are seeking ¥389.3bn  ($3.8bn) in an initial public offering.

Japan Display will sell 140mn new shares at ¥900 to ¥1,100 apiece in the offering, according to terms for the deal obtained by Bloomberg News yesterday. Investors including Sony Corp are offering 213.9mn existing shares at the same price range, the terms show.

The IPO offers a partial exit for state-backed Innovation Network Corp of Japan, which bought a 70% stake in the company for ¥200bn in 2012. Suntory Beverage & Food, the maker of Orangina soda, completed a $3.8bn first-time share sale in June, according to data compiled by Bloomberg.

“Japan Display’s share of the small- and medium-sized panel market is high and there are few players,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management Co in Tokyo. “Demand for Japan Display products will grow along with that of high-end smartphones.”

Japanese stocks were the best performers among major Asian markets over the past year, encouraging investors such as Bain Capital and Cerberus Capital Management LP to recoup funds through first-time share sales. Nomura Holdings Inc, the country’s No. 1 equity underwriter in 2013, expects IPOs will almost double to 1tn yen this year.

Shares of Japan Display will start trading in Tokyo on March 19, according to the terms. Nomura, Morgan Stanley and Goldman Sachs Group are joint global co-ordinators for the offering, the terms show. Bank of America Corp, Deutsche Bank AG and UBS AG are also among banks helping manage the sale.

Japan Display was created when Sony, Toshiba Corp and Hitachi spun off their panel businesses to INCJ after struggling to compete in the television display market.

INCJ, as the government-backed fund is known, was founded in July 2009 to invest in technology that would make Japan’s industries more globally competitive. It has invested about ¥700bn in 57 projects as it focuses on energy, electronics, information technology and biotechnology, it said in a February 12 statement.

The fund has ¥280bn of funds from the government and companies, and has the capacity to invest as much as ¥2tn backed by government guarantees, its website shows.