Losses on bonds sold by Sharp Corp. and NEC Corp. are dragging an index of Japanese technology companies to its worst return in 17 months, as competition from South Korea eats away at earnings.
Notes sold by Sharp, Japan's largest maker of LCD panels, lost 1.2 percent this month, lowering the industry's index return to a negative 0.19 percent, Bank of America Merrill Lynch data show. That puts the companies on course for their worst monthly performance since November 2010. Global peers have returned 0.82 percent in the same period, the data show.
Sharp widened its loss estimate for the year that ended on March 31 to a record ¥380 billion ($4.7 billion), and domestic manufacturers, including NEC, Fujitsu Ltd. and Toshiba Corp., also cut their earnings forecasts. Sharp's operating margin was minus 4.2 percent in the final quarter of 2011 and that of NEC was minus 1.2 percent, compared with 9.7 percent for South Korea's Samsung Electronics Co., data showed.