TCI Goes Short on Japan

I've written of TCI before here. In a post last May for example, I mentioned TCI's proxy contest among shareholders of the Japanese power company J-Power. The management prevailed against TCI in that contest, largely because Japan's government came to their aid. TCI sold its stake in J-Power in October, taking a US$130 million loss.

Now I read that TCI has changed its tack as to its Japanese positions. In order to be a corporate activist, an investor essentially has to be long -- has to own voting equity. But TCI has switched (according to a recent Bloomberg story) to a predominantly short strategy in regards Japan.

TCI has about US$1.2 billion in cumulative short positions in 13 Japanese stocks, including some of that country's biggest names: Toshiba Corp.; Sharp Corp.; Mizuho Financial; Sony Corp., and so forth.

Its short position in Toshiba was worth 39.5 billion yen (US$396 million) at the close of business Wednesday, April 1.

In October of last year the government imposed new requirements on short selling, including disclosure rules, so this data is now available through the Tokyo Stock Exchange's website, though as I say I've lazily taken it from Bloomberg's story.

Here are links, first to Bloomberg;

then to the TSE's English-language page.

Asian markets not impressed

One theme of the news coverage this last weekend of the frenetic negotiations in Washington over the details of a Wall Street bail-out plan was this: they had to get a deal n place before the Asian markets opened, Monday morning in Hong Kong and Tokyo, or Sunday evening in Washington. It was crucial to send a message to the investors in those markets.

Upon waking this morning, we can check -- those investors weren't impressed.

The bottom line of today's HK trading, as measured by the Hang Seng index, is a drop of 669.13 points to 18,012.96. In Tokyo, the Nikkei closed 149.55 down at 11,743.61. In Singapore shares fell 32.45 to 2,379.01.

If there had been no deal, the administration and do-something-quick allies would have cited these numbers as proof of how disastrous waiting is.

But there is a deal, so these numbers will of course be spun as proof that the markets need immediate follow-through.

Follow the sun. What's the story with the Euro markets? In Germany, the DAX is down. In France, the CAC-40 is down. In London, the FTSE is down. Gee, this deal doesn't seemed to have worked any market magic after all, has it?

I'm not saying nuttin'....