Fitch cuts Sony, Panasonic to 'junk'
- Rahul mocks Modi, says his Gujarat development model is a toffee model
- Under fire over Baru's revelation, Congress retorts by calling 'Vajpayee the weakest PM India ever had'
- Narendra Modi, party not separate, no infighting: BJP on Joshi's remarks
- BJP dancing to the tune of RSS; Lok Sabha elections battle between two completely different ideologies, says Sonia Gandhi
- Priyanka Gandhi denies report on fighting polls against Modi, says her focus remains Rae Bareli and Amethi
Ratings agency Fitch cut the debt ratings of Japanese consumer electronics makers Sony Corp and Panasonic Corp to junk status, citing weakness in their businesses.
The downgrades deal a further blow to the floundering Japanese tech giants which have been facing weak demand and fierce competition from Apple Inc and Samsung Electronics.
A strong yen and bumps in China, where growth has slowed and Japanese goods have been targeted in sometimes violent protests recently, have also weighed on their earnings.
The credit rating agency on Thursday downgraded Sony by three notches to BB- minus from BBB minus, saying meaningful recovery will be slow.
Fitch believes that continuing weakness in the home entertainment and sound and mobile products and communications segments will offset the relatively stable music and pictures segments and improvement in the devices segment which makes semiconductors and components, it said in statement.
The downgrade sent Sony's five-year credit default swaps (CDS), insurance-like contracts against debt default or restructuring, 5 basis points wider to 382.5/402.5 basis points.
Panasonic's CDS for the same maturity were quoted at 295/315 basis points, 15 basis points wider than in Thursday morning Asian trade.
In a separate statement, Fitch cut Panasonic to BB from BBB-minus, a two-notch downgrade, citing weakened competitiveness in its TVs and display panels as well as weak cash generation from its operations.
Sony shares were down 0.3 pct in Frankfurt in low volume on Thursday. The shares ended 1.8 percent higher at 834 yen in Tokyo on Thursday before the Fitch announcement, trading not too far from their 32-year closing low of 793 yen hit on Nov. 15. Sony stock is down 40 percent so far this year.
Panasonic shares were down 0.6 pct in Frankfurt, also in low volume. The stock inched up 0.7 percent to close at 407 yen in Tokyo trading, near its 34-year closing low of 385 yen reached on Nov. 13.
- Security men at every step, Shinde keeps ‘safe distance’ from voters, debunks charges
- In Beed, Modi factor dents Munde’s goodwill among Muslims
- Ambareesh campaigns for Nilekani
- Raids on Bellary moneylender yield Rs 8.74 crore cash
- MP faces Amreli villagers’ ire in campaign
- JERC approves sale of solar power at Rs 1.13 per unit