Toshiba drags in Asia amid fresh hopes for Chinese property

Mega technology losses were top of the news bulletins in Asia on Monday, as Toshiba Corporation revealed it expected a record loss for the year.

The Japanese electronics giant said it was looking at an annual loss of JPY 550bn (£3bn), amid a climate of declining sales. Total sales for the year were projected at JPY 6.2trn, down 6.8%.

Toshiba put the wider loss down to restructuring costs and a deterioration in its semiconductor and infrastructure divisions. It planned to cut to 7,000 jobs in consumer electronics, while 5% of its global workforce could be culled by the end of the fiscal year.

It also planned to halt sales of televisions in markets outside Japan, and sell its TV assembling plant in Indonesia.

"By implementing and resolutely executing this action plan, Toshiba hopes to regain the trust of shareholders, investors and all stakeholders, and to achieve a strong corporate institution", the company said in a statement.

Shares in Toshiba slid 9.81% in Tokyo, closing at JPY 254.8, leading the Nikkei Stock Average as the region's only decliner of the day, down 0.4%. Toshiba's woes compounded the uncertainty created by the Bank of Japan's changes to its easing programme, announced last Friday.

The Nikkei was on track to lose 4.2% this month, which would make it the second-worst performing benchmark in the region after Bangkok's SET, which was down 6.5%.

Elsewhere, the Hang Seng rose 0.2% and Seoul's Kospi was up 0.3%. Downunder, the S&P/ASX 200 was flat.

On the mainland, Chinese shares finished at their highest levels in nearly a month on Monday, with the Shanghai Composite Index rising 1.8% to 3642.47 - the highest close since November 25.

The confidence in China came amid expectations Beijing was preparing measures to help boost the country's property sector, which had been dragging the chain for some time.

Shanghai remained on track to gain 5.7% this month, compared to its 1.9% gains in November. The fresh hopes for some sort of government stimulus from the politburo was a stark contrast to the concerns of recent weeks, fueled by the commodities glut and the US interest rates rise.

"We think there will be a lot of priority toward the property sector", said David Millhouse of Forsyth Barr Asia, referring to Beijing officials. He noted that the country's annual Central Economic Work Conference occured over the weekend, which was one of China's most important planning summits of the year.

Millhouse also said Chinese insurers were proving themselves as big buyers of low-value blue chip stocks since the summer stock crash.

Earlier in December, Anbank Insurance Group increased its share in Sino-Ocean Land Holdings, and bought a 5% chunk of the country's largest property developer, China Vanke Company, which was up 1.8%.

China Vanke was busy fighting an unusual takeover offer from one of its rivals, however. Property developer Baoneng Group had been building up its stock in Vanke over recent months, and held 22% on 11 December.

Under China's securities laws, once a shareholder owns 30% of a listed company, it must issue a tender to all other shareholders.

On Monday, China Vanke said it was to disclose details of a restructuring plan next month, which was thought to be a last-ditch bid to end Baoneng's plans. It was understood the restructure would involve the issue of new stock, which would dilute Baoneng's holding and push up the cost of their takeover bid.

The Vanke battle lifted other property shares in Shenzen on Monday. Financial Street Holding Company was up 9.7%, while the index was up 1% overall. In Shanghai, Poly Real Estate Group gained 5.6%, while Gemdale Corporation was up 10%.

There was relief across Victoria Harbour, as shares in Hong Kong's Fosun International rose 2.8%, having plummeted more than 10% in the last week. Investors had shown concern that an investigation the firm's chairman was assisting authorities with could implicate Fosun itself.

Fosun had worked to assure the market that the investigation was of a "personal" nature and not related to the company itself.

On the currency front, Chinese officials moved the onshore yuan stronger against the greenback, having weakened it for 10 sessions in a row. It was fixed at CNY 6.4753 earlier. Under the most recent guidelines, the yuan can trade 2% either side of its loose peg.

In Japan, the yen was trading at JPY 121.363 per dollar, and the Aussie was at 1.39560 at 1135 GMT. The Kiwi was trading at 1.48164 to the USD.