Summarized -- Rush to Sell Shuts Down Tokyo Stock Exchange - New York Times

[David Farber <dave () farber net>]

http://www.nytimes.com/2006/01/18/business/worldbusiness/18cnd-japan- 
stocks.html? 
ei=5094&en=269909c660212ad0&hp=&ex=1137646800&partner=homepage&pagewante 
d=print


By JAMES BROOKE TOKYO, Japan - An avalanche of sell orders forced  
Tokyo’s stock market to close early Wednesday, with the main  
benchmark closing down 2.94 percent, after plunging almost as much on  
Tuesday when it lost 2.84 percent.

...Livedoor shares did not trade Wednesday for lack of buy orders but  
were marked down by the daily 100-yen limit for a second day in a row  
to 496 yen.

...With the abrupt tumble, analysts debated whether the damage would  
stop Thursday with Internet stocks or whether it would pull down the  
world’s second largest market, a bourse that grew 40 percent last  
year, drawing investors from around the world.

“This thing has taken on greed, panic and fear,” complained James  
Fiorillo, an American who advises the Japan Natural Selection Fund,  
one of many foreign funds that heavily expanded investments here last  
year.

...Takafumi Horie, a 33-year-old bristled haired billionaire who  
wears T-shirts to press conferences, enraged Japan’s business  
establishment over the last two years for trying a hostile takeover  
of a radio network and for trying to buy a baseball team.

...In a market where individuals accounted for 50 percent of trades  
on the market last year, investors panicked Wednesday, rushing in too  
many trade orders for Tokyo’s often troubled market computer system.

Compounding investor anxiety, stock exchange officials announced in  
advance that the order volume was expected to reach the system’s  
capacity of 4.5 million trades a day, forcing an early close.  After  
normally instantaneous trades started to take five minutes and more  
to complete, exchange officials closed the market 20 minutes before  
the normal 3 pm closing time.

...“If Livedoor did not disclose correct data for their financial  
statement, that is big, sort of a similar situation to Enron,” Nobuo  
Sayama, a business professor at Hitotsubashi University said after  
the market closed Wednesday.  Referring to the Internet companies  
that have clustered in Tokyo’s prestigious new hotel and office  
tower, he predicted “This event is a start of big problem that will  
expand to other Roppongi Hills companies.

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