Profits at listed firms forecast to be up 5.7% in FY2008: Nikkei

November 17, 2007
By Ken Worsley

Data compiled by the Nikkei shows expectations that Japan’s listed firms will report a 5.7% increase in pre-tax profit for fiscal 2008, marking the fifth consecutive year of increase. According to the writeup, those firms addressing demand in emerging markets are among those performing the best.

Amongst domestic firms, we’re seeing a lot more trouble. The supply of new condos in Tokyo is down just over 9.1% from last year, due to a combination of stricter building regulations being put in place and poor risk management on the part of construction firms. Subprime-related losses are expected to grow at Japan’s banks, and four of the eight major credit card and consumer credit companies posted net losses for the first half of fiscal 2007, in part because of requests from customers to reimburse for overcharged interest payments (ie, they had been ripping people off and getting away with it for a long time, and actually expecting to work that into their financial model).

And on Friday, the Fair Trade Commission warned NTT DoCoMo, Japan’s largest cellular phone service provider, and KDDI, the second-largest, that their advertisements for half-price basic fees were not only misleading, but also printed too small. This follows warnings given to Softbank back in December over their misleading “Zero” campaign.

Should external demand remain strong, the Nikkei’s forecast may be spot-on. It’s seeming more and more as though profits (and GDP) are going to go the way of external demand…

Filed Under Business, Economic Reports