Due to market expectations that Nissan Motor (NSANY.US) and Honda Motor (HMC.US) may cooperate to rescue this Japanese Auto Manufacturer from the financial crisis, Nissan Motor surged 24% on Wednesday.
Zhito Finance APP learned that due to market expectations that Nissan Motor (NSANY.US) and Honda Motor (HMC.US) may cooperate to rescue this Japanese Auto Manufacturer from the financial crisis, Nissan Motor surged 24% on Wednesday, marking the largest increase in at least 50 years.
Investors welcomed the new news about Nissan Motor, which had previously been struggling, as the stock became the best performer in Japan's Nikkei 225 Index (Nikkei 225 stock Average). Under the current leadership, the company's stock performance is the worst in 50 years.
Julie Bot, a senior Analyst at London research firm Pelham Smithers Associates Ltd., wrote in a report: "Considering that Nissan will receive support from a partner that is financially and operationally stronger, this is definitely good news."
Honda's Executive Vice President Shinji Aoyama stated on Wednesday that Honda is considering several options, including mergers, capital cooperation, or forming a holding company, after reports indicated that negotiations were taking place between the two Auto Manufacturers.
Mitsubishi Motors Corp. is reportedly a potential participant in this collaboration, and its stock also surged significantly, rising as much as 20%, marking the largest increase since 2013.
In contrast, Honda's stock fell by 3.4%, due to concerns that it would have to bail out Nissan. Bloomberg Intelligence senior Analyst Tatsuo Yoshida mentioned that a merger would not bring Honda "short-term benefits."
The credit market has also shown different reactions, with Nissan's dollar bond spreads narrowing to the greatest extent ever, while Honda Motor's credit default swap premiums skyrocketed, reflecting investors' concerns.