Loading...
Symbols:
TAKAF.PK Forum Topics
loading ...Recent TAKAF.PK Articles
- Is Japan the Next "Subprime Flashpoint"?
- John Bethel's Portfolio Through 3Q07
-
John's Bethel's Portfolio: Up 44.96% Through 2Q07
on Jul 02, 2007| by
- Takefuji Corporation Forecasts a Return to Profit
- Does Takefuji's Profit Warning Indicate a Japanese Consumer Lending Crisis?
- Seeing Opportunity in Takefuji -- Japan's Most Hated Value Stock
- Takefuji a Strong Value Proposition Despite Another Expected Earnings Miss
- Things Getting Interesting for Takefuji: Will Investors Profit?
- Takefuji Coping with Uncertainty
- Takefuji Founder and Former Chairman Dies
- Full List of Articles »
Trading Center
Hedge Fund Jobs
Job Seekers: Search jobs by category, get job alerts by email or live feed, apply online See full list of jobs »
Employers: See all recruitment options, get applications online or by email Post a job »
Editors
General Discussion on TAKAF.PK
Is this a buy or a sell? Replyjeannenot
Seeing Opportunity in Takefuji -- Japan's Most Hated Value Stock [view article]
Who dares win ! Replyjeannenot
Seeing Opportunity in Takefuji -- Japan's Most Hated Value Stock [view article]
who dares win! ReplySeeing Opportunity in Takefuji -- Japan's Most Hated Value Stock [view article]
Pascal, thanks for leaving a comment and stressing the importance of the threat of reimbursement costs. Indeed, this is a risk for investing in the consumer lender stocks. And the enforcement of repaying "past" excess interest payments received is worrisome. It looks like UBS warned today of the possibility of further downward revisions during the remainder of the second-half of the fiscal year.I still see an opportunity here and agree, as you put it, "there is a great value opportunity for daring investors."
I have increased my position in NIS Group (NYSE: NIS) following its downward revised forecasts and what I believe a bottoming of the stock at current levels. No doubt this is speculative given the uncertainty, but I like NIS's diversified financial services businesses, and lesser exposure to consumer lending, even though it will suffer from the reimbursement costs.
For disclosure purposes, at this time I still do not own a position in Takefuji, nor do I own any shares of other Japanese consumer lenders. Reply
jeannenot
Seeing Opportunity in Takefuji -- Japan's Most Hated Value Stock [view article]
The logic beneath the investment is good, no doubt that most negative elements have been factored in the consumer loan sector and in fact Takefuji , Eyeful, Acom had started to bottom out by mid september ...however new worrying elements appeared since.Key concern is not consumer loan rate cap in itself but interest overpayment special loss reserve legual basis.. I explain : the problem emerged from the grey zone set between previous allowed interest payments (up to 30 %) and new capped interest payments set temporarily at 18 20 %..
By mid march the Japanese institute of certified public accountants was swamped by a huge number of 'overpayments' requests from customers. The set guidelines were therefore to order the consumer loan companies to set additional reserves to proceed to refunding of -recent- interest overpayment .
Accrued amount should be set as a special loss reserve against net earnings. Takefuji the largest consumer loan lender started with 41 billion yen reserves quickly followed suit by other lenders and the cost of overpaid interest refunding soared to big levels for consumer loan companies , this explain the current rush to revise dowside net earnings expectations for full year estimates . This said mid term current earnings were good for NIS ( example) and Takefuji.
Unfortunatly things went even a bit further when the certified accountants association side rose the idea to repay also -PAST- interest overdue payments (and not only recent ones) to the outcry of industry. The association said they were working on even stricter compulsory reserve basis to that purpose implying further special loss reserves for the lenders. Consumer companies then fought back saying that there was a danger to eat easily into shareholders equity.. Analysts were quick to calculate that if for one company loan balance is 1 trillion Yen reserves over charged interest refunding could easily go up by some 100th billion yen (indeed eating into the lenders shareholder's equity). This ignited a new dowside revision rush.
The key problem rather than cap on lending rates is therefore the extreme harsh reserves drawing guidelines imposed by certified public accountants for the consumer lenders ( and the soaring costs associated with it).
the market is certainly expecting a full sector shakeout but the risk inherent to buying mid small consumer loan companies equals taking also the over payments refunding special reserve liabilities... , so too high expectations are forbidden for the short term.
This said unless this 'special loss reserve basis' is made even harsher by the certified public accountants ( which could easily eat into the lenders sherholder's equity ) then there is a great value opportunity for daring investors. But the above mentionned must be monitored for that purpose. Reply
I Like Takefuji for the Long Haul [view article]
I think the only way to make money from Takefuji or any other consumer finance names is to short it when it pops up. Reply