Japan Tobacco rises on government share sale delay

This file photo shows Japan Tobacco (JT) official displaying 'Mild Seven Super Lights Eco Style' cigarrete boxes during a press preview in Tokyo, in 2005. JT shares jumped more than seven percent in Tokyo trade on Monday after the government said it would delay selling part of its stake in the former monopoly

Japan Tobacco (JT) shares jumped in Tokyo trade on Monday after the government said it would delay selling part of its stake in the former monopoly. Choppy markets and an election next month, which could see a change in leadership, were among reasons for putting off the sale of part of Tokyo's 50.0 percent holding in the tobacco giant, a finance ministry official said. JT shares closed 6.53 percent higher at 2,411 yen. To help fund its reconstruction budget after last year's quake-tsunami disasters, Tokyo had planned to cut its stake in JT to about one-third this year, booking a profit of more than 500 billion yen ($6.15 billion) on the sale, the official said. But a spokesman for Japan Tobacco, whose brands including Camel, Benson & Hedges and Winston, said the firm was still ready to buy back shares from the government. "We are aware of the government's decision," he told AFP. "We haven't changed our position, which is that we are ready to consider buying some of the shares if the government sells part of its stake." On Friday, Japanese Prime Minister Yoshihiko Noda dissolved the lower house of parliament for an election next month, in a political gamble widely expected to see his centre-left party ousted from power. A decision on raising cigarette taxes next year is pending, while stock markets have been choppy owing to fears over a global economic slowdown and Europe's simmering debt crisis. JT, which controls about two-thirds of the Japanese market, announced Friday it would buy a major Egyptian waterpipe tobacco manufacturer for an undisclosed amount.

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