Mad Cow fears hit Japan food shares

CBS Market Watch ^ | 11 September 2001 | Mariko Ando

[Vigilanteman]

Mad Cow fears hit Japan food shares

Tokyo ends higher; Taipei, Seoul, HK ease

By Mariko Ando, CBS.MarketWatch.com Last Update: 3:38 AM ET Sept. 11, 2001

TOKYO (CBS.MW) - Japanese investors spat out food shares Tuesday on fears that consumers will stay away from meat and meat-related products after officials discovered what is likely the first instance of Mad Cow disease in Japan.

Despite the drag from the food sector, Tokyo's Nikkei managed to land in the positive territory, helped by gains for exporters following the yen's decline against the dollar.

The Nikkei Average added 0.95 percent, or 97.26 points, to close at 10,292.95. On Monday, the index tumbled 3.05 percent to end at 10,195.69 - a level not seen since August 1984.

The broader Topix inched up 0.2 percent to 1,058.12.

Investors rushed to sell shares of restaurant operators and meat suppliers following the government's announcement late Monday that a cow suspected of having mad cow disease had been found in Chiba, near Tokyo. It's the first suspected case of the disease in the island.

Restaurant chain operator Yoshinoya (JP:9861: news, chart, profile), which sells bowls of thinly sliced beef over rice, plunged 9 percent to 200,000 yen, while McDonald's Japan (JP:2702: news, chart, profile) (MCD: news, chart, profile) dropped 2.4 percent to 3,490 yen.

Nippon Ham (JP:2282: news, chart, profile) plummeted 15 percent to 1,280 yen, while Itoham Foods tumbled 6.3 percent to 385 yen after being ask-only earlier in the day.

Gains for exporters were able to offset losses in the food sector. Leading issues such as Hitachi and Fuji Photo were helped by the weaker yen, which tends to bolster overseas revenues.

The dollar was quoted at 121.60 yen in mid afternoon trade in Tokyo, up from 121.00 yen in New York late Monday. It changed hands at 120.07 yen late Monday in Tokyo.

Hitachi (HIT: news, chart, profile) (JP:6501: news, chart, profile) rose 1.6 percent to 833 yen, rebounding from the year's low of 818 yen hit the previous day. Hitachi's shares have fallen over 40 percent since May 22, when they hit year's high of 1,380 yen.

Fuji Photo Film (FUJIY: news, chart, profile) (JP:4901: news, chart, profile) jumped 3.2 percent to 4,540 yen. NEC (NIPNY: news, chart, profile) (JP:6701: news, chart, profile) rose 1.2 percent to 1,250 yen.

Mitsubishi Electric (MIELY: news, chart, profile) (JP:6503: news, chart, profile) rose 1.9 percent to 430 yen. The Nihon Keizai daily reported that the country's third largest electrical machinery maker's operating profit could fall 80 percent to 40 billion yen in the year through March.

Taiwan's Weighted Index closed down for the fifth straight day, losing another 2.62 percent to 4,176.93. Leading chipmakers lost ground, failing to catch upward momentum from the Nasdaq's firmer close.

The world's foundry leader Taiwan Semiconductor Manufacturing (TSM: news, chart, profile) fell 0.3 percent to 63.50 Taiwan dollars, while United Microelectronics (UMC: news, chart, profile) shed 1.8 percent to T$38.90.</font face>

[Vigilanteman]

</font face> The vast majority of Japan's beef is imported, not home-grown. Japan has been careful to import most meat from disease-free countries. The United States and Australia are the favored sources.

The cow destroyed was home-grown though there is some basis for the speculation that the disease originated in a shipment of bonemeal imported from the E.C.

So far, no other cases have been found, but most of the companies dealing in imported beef took a major hit in a positive market day.