Nikkei little changed as property down, drugs up

By Staff
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TOKYO, Feb 27 (Reuters) The Nikkei share average was little changed on Tuesday as property firms such as Mitsubishi Estate Co. Ltd. lost ground on concern their stock prices may have outpaced potential earnings, but shares of drug makers helped counter the decline.

Drug companies such as Takeda Pharmaceutical Co. Ltd., as well as utilities, benefited as investors continued to seek shares with attractive dividend yields.

''There are concerns that stock prices are overheated,'' said Masayoshi Okamoto, head of dealing at Jujiya Securities. ''In particular Mitsui Fudosan Co. Ltd., but even more so Mitsubishi Estate looks overpriced.'' The Nikkei was down 6.94 points at 18,208.41 by the close of the morning session. The broad TOPIX index was up 0.02 percent at 1,817.30.

Shares of Mitsubishi Estate fell 2.8 percent to 3,800 yen.

The property firm has advanced nearly 50 percent during the last three months.

Even after losing some ground from its lifetime high on Friday, the stock still has one of the highest price-to-earnings ratios among the Nikkei 225 HPEN225.

The price-to-earnings, or PE, ratio is one metric used to value stocks. Currently, Mitsubishi Estate has a price of nearly 60 times its estimated earnings per share, compared to the average of about 21 times for the Nikkei 225.

Mitsui Fudosan fell 1.1 percent to 3,530 yen after rising some 38 percent over the last three months. That is nearly 45 times its estimated earnings per share.

DRUGS, UTILITIES But shares of drug companies and utilities helped counter losses. Investors continued to home in on such stocks, which are seen as having attractive dividend yields. YLDN225.T> ''For drug makers and utilities, dividend yield continues to be the draw,'' said Ken Masuda, senior dealer in equities at Shinko Securities.

Takeda Pharmaceutical rose 2.3 percent to 8,380 yen. The stock has an estimated dividend yield of 1.4, above the average of 1.03 for the Nikkei 225, according to the latest Reuters data.

Likewise Astellas Pharmaceutical gained 1.9 percent to 5,340 yen, helped by a dividend yield of 1.5.

Tokyo Electric Power Co. Ltd. rose 2.6 percent to 4,270 yen.

Its estimated yield is 1.4, also well above the average for the Nikkei.

Shares of Japan's three major mobile-phone carriers rose following a brokerage upgrade.

NTT DoCoMo Inc., KDDI Corp. and Softbank Corp. all advanced after Mizuho Securities raised its ratings on the three.

Mizuho raised its rating on DoCoMo to ''2'' from ''3'' and on KDDI and Softbank to ''1'' from ''3'', analyst Atsuo Takahashi said in a research note on Monday.

DoCoMo, Japan's biggest mobile phone operator, rose 3.6 percent to 229,000 yen. KDDI, Japan's No. 2 operator, adds 2.3 percent to 936,000 yen and Softbank gains 2.6 percent to 3,130 yen.

Trade remained active with 1.5 billion shares changing hands, compared with last week's morning average volume of 1.3 billion shares.

Decliners outnumbered advancers 897 to 699.

REUTERS CS DS1055

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