Japan Tobacco rises on government share sale delay

Japan Tobacco shares increased in Tokyo trade on November 19 after the authorities stated that it would postpone selling part of its stake in the former monopoly.

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Japan Tobacco International

Choppy markets and an election in December, which could determine a change in leadership, were between factors for postponing the sale of part of Tokyo’s 50.0% holding in the cigarette company, a finance ministry official mentioned.

Japan Tobacco shares closed 6.53% higher at 2,411 yen.

To help finance its renovation budget after quake-tsunami disasters in March 2011, Tokyo had intended to cut its stake in Japan Tobacco to around one-third this year, getting a gain of more than 500 billion yen ($6.15 billion) on the sale, the official reported.

However, a spokesman for the cigarette company, which is the maker of Camel and Winston cigarette brands, said that Japan Tobacco was still set to repurchase shares from the government.

A spokesman added that the cigarette company knows about the decision of the government.

“Japan Tobacco did not change its position, which is that the company is ready to think about buying some of the shares if the government sells part of its stake.”

On November 16, Japanese Prime Minister Yoshihiko Noda dissolved the lower house of parliament for an election in December, in a political gamble broadly estimated to find his centre-left party ousted from power.

A decision to increase cigarette taxes in 2013 is unresolved, while stock markets have been choppy because of concerns over a global economic collapse and Europe’s simmering financial debt crisis.

Japan Tobacco, which controls about two-thirds of the Japanese tobacco market, declared on November 16 that it would acquire a big Egyptian waterpipe tobacco company for an undisclosed sum.

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