Tokyo - Shares of Toshiba recovered from an early dive
after the Asahi newspaper reported regulatory concerns about the company’s
earnings.
Toshiba rose 2.3 percent to 289.6 yen as of 11:13 a.m. in
Tokyo after slumping as much as 6.9 percent in early trade. Japan’s Securities
and Exchange Surveillance Commission suspects the company padded earnings by
about 40 billion yen ($339 million) in the three fiscal years through March
2014, Asahi reported citing unidentified sources. Toshiba didn’t immediately
respond to a request for comment.
Toshiba shares have been under pressure for more than a
week after announcing it may write down billions of dollars at its energy unit.
That news came as the company, which also makes personal computers and memory
chips, recovers from an accounting scandal in 2015 that claimed the jobs of
three presidents, led to record losses and prompted job cuts and the sale of businesses.
Investors have priced in a lot of bad news and the focus
is shifting to positives, such as the company’s semiconductor business,
according to Masahiko Ishino, an analyst at Tokai Tokyo Securities.
“The market instead seems to be focusing on the strength
in the semiconductor names,” Ishino said. “Whether it is their nuclear or other
businesses, Toshiba is an organisation that possesses very beneficial
technology for Japan. And that’s the frame-of-mind we should be taking when
looking at this.”
Read also: World's biggest pension fund sues Toshiba
Semiconductor names rallied globally after Wells Fargo
& Company analysts said they see a chip recovery gathering momentum in
2017. Micron Technology Inc. gained 2.9 percent on Tuesday in New York, while
Japan’s Sumco climbed 3.3 percent on Wednesday.
Toshiba shares slumped 37 percent last week after
announcing the potential writedown.
The company is likely to take emergency actions such as
selling more assets and negotiating with unions, Claudio Aritomi and Amit Garg,
analysts at CLSA Ltd., said in a report last week. The company may also need to
carefully work with lenders for continued support.
“Negative newsflow is likely to continue near term, but
we expect a rebound once fears of the bankruptcy/delisting scenario starts
receding,” the analysts wrote in the report.
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