JT shares plunged on the 6th, with the closing price approaching the limit-down level. Selling spread amid concerns over the impact on management after reports emerged that the Russian president had signed a decree placing 4 of JT’s local subsidiaries under provisional administration.
On the 6th, shares of Japan Tobacco (JT) fell 19.3% from the previous close on the Tokyo Stock Exchange, ending at ¥6,269 and approaching the limit-down level. Sell orders remained prominent from immediately after the market opened, and measures were taken to allow some trades to be executed at the close. The shares had hit a year-to-date high the previous day but weakened as selling accelerated.
It emerged that Russian President Putin had signed a decree on the 5th placing 4 of JT’s local subsidiaries under the provisional administration of Russian companies, raising concerns about the impact on management as part of pressure to impose sanctions on Japan. Selling orders subsequently flooded the market.
JT’s Russian business accounts for approximately 10% of total sales and holds the top position in the Russian market. The company has maintained the business even as Japanese companies have withdrawn from Russia since the invasion of Ukraine, but the latest measure implies that the impact on the business could be prolonged. JT had previously been viewed as a defensive stock, but the latest development has increased uncertainty surrounding its operating environment.