Sanyo shares slide to 26-year low after Goldman Sachs cuts rating

TOKYO - Shares of Sanyo Electric, which forecasts a second year of losses, slid to a 26-year low after Goldman Sachs cut the company's rating because the resignation of its chief financial officer may delay efforts to revive earnings.

Sanyo's stock fell 4.1 per cent yesterday to 259 ($3.23), the lowest since December 1978, on the Tokyo Stock Exchange.

The stock's fall yesterday was the biggest on the MSCI World Index, which tracks shares of 1809 companies worldwide.

Chief financial officer Yoichiro Furuse quit on October 7, a week after the Osaka-based company widened its annual loss forecast to 140 billion ($1.75 billion) from an earlier 92 billion estimate. Chief executive Tomoyo Nonaka in July said she would cut 15 per cent of its workforce and focus resources on batteries, solar cells and areas related to energy and the environment to restore earnings growth.

"There is a risk that Furuse's departure could stall the company's structural reforms, and also lead to an exodus of talent from the company," said Yuji Fujimori, a Tokyo-based analyst at Goldman Sachs, in a report to clients.

Fujimori cut his rating on Sanyo to "underperform" from "in-line".

Sanyo, the world's third-biggest digital-camera supplier, said it will announce first-half earnings on November 18, about three weeks later than its schedule.

The company also makes chips, washing machines, digital cameras and other gadgets.

Of the 19 analysts tracked by Bloomberg News, 14 analysts recommend selling the shares and only John Yang at Standard & Poor's Equities has a "buy" rating.

- BLOOMBERG