Market and product
Yokohama Rubber Leads Advances by Japanese Tiremakers
April 27 (Bloomberg) -- Yokohama Rubber Co. led a gain by Japanese tiremakers after the improved demand outlook prompted Citigroup Inc. to recommend the stocks.
Shares of Yokohama Rubber, Japan’s third-biggest tiremaker by market value, jumped 3.5 percent to 442 yen at the 11 a.m. break in Tokyo. Market leader Bridgestone Corp. advanced 1.6 percent to 1,588 yen, while closest rival Sumitomo Rubber Industries Ltd. gained 1.7 percent to 830 yen. A gauge of tiremakers posted the steepest climb among the Topix’s 33 industry groups.
“We raise our 2010 global demand growth forecast to 8.2 percent from 5.5 percent,” Arifumi Yoshida and Noriyuki Matsushima, analysts for Citi, wrote about demand for tires in a report yesterday. “We expect investors to start pricing in earnings recoveries next fiscal year once the seasonal increase in natural rubber prices ends.”
The analysts raised their ratings on Bridgestone and Sumitomo Rubber to “buy” from “hold” and Yokohama Rubber to “buy” from “sell,” according to the report. Yoshida is the No. 2 ranked analyst in Nikkei Inc.’s 2010 survey.
Thailand, the world’s largest exporter of rubber, has winter from February to April, when trees shed their leaves and latex output slows. The free-on-board price, which excludes freight and insurance, of Thai RSS-3 grade rubber for May delivery rose to a record 130.55 baht ($4.06) per kilogram yesterday, according to the Rubber Institute of Thailand’s Web site.
(Source: Bloomberg, by Masaki Kondo, Editor: Nick Gentle, Sam Waite)
