Shares crash for Toyota

Published on Friday 12 January 2001 00:00

SHARES in Toyota tumbled to 16-month lows yesterday on speculation the carmaking giant and its banks were selling off their mutually-held shares ahead of planned bank mergers and a new accounting system in April.

Shares in Japan’s biggest automaker closed down 7.36 per cent at 3,400 yen after slumping to 3,370 yen in early trade. The fall was partly attributed to speculation that Toyota may announce that the banks plan to sell 300-400 billion yen (1.78-2.3 billion) worth of Toyota shares in a secondary offering in the coming weeks.

Toyota’s fall piled on the agony for Tokyo’s stock market, already reeling from a widely anticipated new share offer from mobile phone giant NTT DoCoMo, sending the Nikkei average to its lowest close since October 1998.

"When large cap issues like DoCoMo and Toyota lose ground this much, it really creates a "sell" feeling for the entire market," said one analyst at Sakura Securities.

Traditionally, banks sell corporate shares held originally to secure business ties in order to window-dress their books ahead of the end of the business year.