The Financial Express February 13, 2002
Japan stock-buying body to detail timetable soon Tokyo, February 12: Japan's stock-buying body will decide soon on the period during which banks will be able to sell it their unwanted stockholdings, an official at the body said on Tuesday. Banks' Shareholdings Purchase Corp has been set up with state backing to buy shares from banks, a move that could help stem the recent slide in the Tokyo stock market and shore up banks' capital, hit by losses on their shareholdings. In response to calls for prompt action from Finance Minister Masajuro Shiokawa and Financial Services Agency Minister Hakuo Yanagisawa, the body is likely to call a meeting of committee members this week to decide on a purchasing schedule, which could start later in the week, industry sources said. Japanese stocks slid to 18-year lows last week on concern over the slow progress in banks' bad debt disposal and the worsening economy. Japan's top banks on Tuesday reiterated they would "actively" make use of the body but said nothing had been decided on the specific amount or individual shares they would sell. Banks will be eager to get rid of shares before the financial year closes at the end of March, when they will have to book their stockholdings at market value. The period during which the body would be open to make purchases could last for some weeks, the official said. It will set fixed periods whenever necessary during which banks can sell shares. The stock-buying entity, set up on January 30 by a group of more than 100 financial institutions, aims to help banks rid themselves of stockholdings whose fall in value has eaten into their capital at a time when bad loans are also causing them huge problems. It can borrow up to two trillion yen ($15 billion) from banks, with a government guarantee, to finance the purchases as banks unwind cross-shareholding ties with their corporate clients. Raising that cap would require a regulatory revision. - Reuters � 2002: Indian Express Newspapers (Bombay) Ltd. All rights reserved throughout the world.
