Japanese Commodity Stocks May Advance on Oil, Copper Rally

By Patrick Rial


Nov. 15 (Bloomberg) -- Japanese commodity-related shares such as Mitsui & Co. may climb after the price of oil had its biggest gain in two weeks and copper rose the most in 16 months.

Daikin Industries Ltd. may lead advances by companies reporting earnings that exceeded estimates, after Japan's biggest maker of air conditioners said first-half profit doubled.

``Earnings at companies here are proving to be quite strong and investors are going to continue buying the ones that are beating expectations,'' said Mitsushige Akino, who oversees $468 million in assets at Ichiyoshi Investment Management Co. in Tokyo.

Exporters of consumer goods such as Matsushita Electric Industrial Co. may drop after the U.S. Commerce Department said department-store sales fell in October.

Mizuho Financial Group Inc., Japan second-largest publicly traded bank may slip after the company cut its full-year profit forecast by 13 percent due to mounting losses on U.S. subprime- mortgage investments.

Nikkei 225 Stock Average futures expiring in December last traded in Chicago at 15,515, down from the close of 15,610 in Osaka, Japan, and 15,620 in Singapore yesterday. The Bank of New York Japan ADR Index, which tracks the nation's American depositary receipts, lost 0.2 percent.

Yesterday, the Nikkei jumped 2.5 percent to 15,499.56 and the Topix index rallied 3 percent to 1,497.71.

Oil, Copper Rally

U.S.-traded receipts of Mitsui & Co., whose profits are the most sensitive among Japan's trading houses to changes in the price of oil, rose 0.6 percent from the closing share price in Tokyo yesterday. Those of Sumitomo Corp., the nation's third- biggest trading company, rose 0.3 percent.

Crude oil for December delivery jumped 3.2 percent to $94.09 a barrel in New York, the biggest gain since Oct. 31. Copper futures surged 6.1 percent, the steepest rally since July 2006.

Daikin said yesterday profit in the six months to Sept. 30 more than doubled to 49.1 billion ($441 million.) That was more than the 39 billion yen the company had estimated. Daikin also lifted its full-year forecast by 60 percent.

``Stronger-than-expected growth in air conditioner sales to Europe and China was a positive,'' Shigeki Okazaki, an analyst at Nomura Holdings Inc., wrote in a note to clients dated yesterday. ``We regard Daikin Industries as a company positioned to benefit from growing environmental awareness around the world.''

Elsewhere, property developer Urban Corp. said in a preliminary earning statement yesterday net income will be 14 percent higher than previously forecast. Hakuhodo DY Holdings Inc., an advertising company, said yesterday first-half profit more than doubled, prompting Credit Suisse Group to raise its recommendation on the shares to ``outperform'' from ``neutral.''

U.S. Sales

Matsushita, the maker of Panasonic-brand products, and Honda Motor Co., Japan's second-largest automaker, may drop.

U.S. department store sales fell 0.5 percent in October, the Commerce Department said yesterday. Additionally, Macy's Inc. tumbled the most in five years after saying same-store sales may drop in the fourth quarter and revenue will grow less than expected. The reports damped confidence sparked by Wal-Mart Stores Inc.'s earnings the previous day that exceeded analyst estimates.

Mizuho lowered its full-year net income forecast by 13 percent to 650 billion yen because of losses on investments related to U.S. home loans to borrowers with poor credit histories.