Machida-shi
08/12/2005, 15h04
J-Com's Tokyo Debut Marred by $2.8 Bln Trading Error
Dec. 8 (Bloomberg) -- A $2.8 billion trading error threw a $14 million initial share sale by Japanese telecommunications outsourcing company J-Com Co. into disarray, driving brokerage and bank stocks lower.
``We are aware that an order that is hard to comprehend has been placed,'' said Tomoharu Nakao, a manager at the Tokyo Stock Exchange. ``We haven't confirmed who might have done it and even if we do, we may not be able to release such confidential information.''
Nomura Holdings Inc., Daiwa Securities Group Inc. and Nikko Cordial Corp. led Japanese brokerage shares lower after the errant trade raised concern over possible losses. The Topix index tracking 18 Japanese brokerages fell 3.5 percent, the biggest drop since Oct. 6, with 17 of the stocks declining.
Shares of Osaka-based J-Com, which debuted today on the Tokyo Stock Exchange's board for start-ups, fell to a limit low of 572,000 yen when orders to sell about 600,000 shares at that price were made, exchange data compiled by Bloomberg shows. The shares then jumped to a limit high of 772,000 yen.
In the IPO, J-Com sold 2,800 shares at 610,000 yen apiece, Bloomberg data shows. The company has 15,000 shares outstanding.
Nikko Cordial Corp., whose Nikko Citigroup Ltd. unit arranged the share sale, said in a statement distributed at the Tokyo Stock Exchange that it isn't facing a ``massive'' trading loss from J-Com.
Daishu Nagata, spokesman at Daiwa Securities SMBC Co., said the firm, the investment banking unit of Daiwa Securities, wasn't involved in the transaction. Shuji Sato, a spokesman for Nomura, said the same.
The error echoes a similar mistake on Nov. 30, 2001, when UBS AG mistakenly sold 610,000 shares in Dentsu Inc. for 16 yen apiece on the company's debut. UBS had helped sell the company's shares at 420,000 yen in the IPO.
UBS sold 65,699 shares before canceling the order, according to information obtained from the stock exchange's trading system, and was able to buy back 18,339 shares. That meant the bank needed to buy back 47,360 shares to deliver stock sold that it didn't own.
Nikko Cordial, Japan's third-largest brokerage by revenue, fell as much as 8 percent in morning trade. The stock closed 3.3 percent lower at 3 p.m. in Tokyo.
Nomura Holdings, Japan's biggest brokerage, dropped 3.7 percent. Daiwa Securities, which ranks second, fell 3.3 percent.
Shares of Mizuho Financial Group Inc., which owns three brokerages, fell 3.1 percent.
Dec. 8 (Bloomberg) -- A $2.8 billion trading error threw a $14 million initial share sale by Japanese telecommunications outsourcing company J-Com Co. into disarray, driving brokerage and bank stocks lower.
``We are aware that an order that is hard to comprehend has been placed,'' said Tomoharu Nakao, a manager at the Tokyo Stock Exchange. ``We haven't confirmed who might have done it and even if we do, we may not be able to release such confidential information.''
Nomura Holdings Inc., Daiwa Securities Group Inc. and Nikko Cordial Corp. led Japanese brokerage shares lower after the errant trade raised concern over possible losses. The Topix index tracking 18 Japanese brokerages fell 3.5 percent, the biggest drop since Oct. 6, with 17 of the stocks declining.
Shares of Osaka-based J-Com, which debuted today on the Tokyo Stock Exchange's board for start-ups, fell to a limit low of 572,000 yen when orders to sell about 600,000 shares at that price were made, exchange data compiled by Bloomberg shows. The shares then jumped to a limit high of 772,000 yen.
In the IPO, J-Com sold 2,800 shares at 610,000 yen apiece, Bloomberg data shows. The company has 15,000 shares outstanding.
Nikko Cordial Corp., whose Nikko Citigroup Ltd. unit arranged the share sale, said in a statement distributed at the Tokyo Stock Exchange that it isn't facing a ``massive'' trading loss from J-Com.
Daishu Nagata, spokesman at Daiwa Securities SMBC Co., said the firm, the investment banking unit of Daiwa Securities, wasn't involved in the transaction. Shuji Sato, a spokesman for Nomura, said the same.
The error echoes a similar mistake on Nov. 30, 2001, when UBS AG mistakenly sold 610,000 shares in Dentsu Inc. for 16 yen apiece on the company's debut. UBS had helped sell the company's shares at 420,000 yen in the IPO.
UBS sold 65,699 shares before canceling the order, according to information obtained from the stock exchange's trading system, and was able to buy back 18,339 shares. That meant the bank needed to buy back 47,360 shares to deliver stock sold that it didn't own.
Nikko Cordial, Japan's third-largest brokerage by revenue, fell as much as 8 percent in morning trade. The stock closed 3.3 percent lower at 3 p.m. in Tokyo.
Nomura Holdings, Japan's biggest brokerage, dropped 3.7 percent. Daiwa Securities, which ranks second, fell 3.3 percent.
Shares of Mizuho Financial Group Inc., which owns three brokerages, fell 3.1 percent.