The markets in Tokyo reacted strongly yesterday to the news that a Japanese Internet firm is suspected of violating Japanese securities laws.
Investigators from the Tokyo district prosecutors` office and the Securities and Exchange Surveillance Commission raided the Tokyo headquarters of Livedoor on suspicion that the company had spread false information to investors.
The effects of the raid caused widespread panic on Tokyo`s Nikkei Index yesterday, global media reported. However, local analysts say the incident is not likely to affect the rand, which is currently driven by the gold price. There was no significant impact on the JSE either.
An Andisa Securities trader says: "A report by US investment bank Morgan Stanley that upgraded international telecommunications stocks has had a positive effect on Telkom and MTN." He says Livedoor has had no direct effect on the local market. "That is a well known punting stock in Japan but hardly known out of that country."
South African investors are more concerned about the poor results from US heavyweights Intel, Apple and Yahoo issued yesterday.
Livedoor, one of Japan`s best-known Internet companies, is accused of producing fraudulent income statements in order to boost its stock prices. Subsequent to the raid, sales of the stock and all stocks in the same sector sold out.
CNN reported this morning that 38-year-old Hideaki Noguchi, an executive of HS Securities, the firm involved in takeover deals by Livedoor, was found dead in Okinawa.
The flood of sell orders forced the Tokyo Stock Exchange to close early yesterday as investors stampeded from the world`s second-largest share market.
Meanwhile, Livedoor ended at 416 yen, down by its daily limit of 16% from Wednesday. The stock is down 40% from its 696 yen closing level on Monday just before the investigation became public. Local media reports have said Livedoor could be delisted as a result of the investigation, but the Tokyo Stock Exchange denied it was considering such action.
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