Jittery Japan may delay NTT sell-off

By CNN's Kristie Lu Stout

TOKYO, Japan (CNN) -- In the wake of a tumbling stock market, the Japanese government may delay a further sell-off of its NTT shares until next year.

Finance Ministry sources told the Nihon Keizai Shimbun business daily that the government may hold off its NTT stake sale until January-March 2002.

Shaken by the terrorist strikes in the U.S. and fears that the attacks would spur worldwide economic damage, the Nikkei dived 6.6 percent Wednesday to close at its lowest level in almost 18 years.

Thursday morning it recovered slightly, but dipped again after the midday break.

Stock nears record low

NTT stock closed down 25,000 yen Wednesday to end trading at 456,000 yen. it climbed back to 470,000 yen by midday Thursday.

The stock has plunged 52 percent since the government last sold part of its NTT stake in November 2000.

The next share sale was slated to take place between October to December this year.

With the share price hitting close to its record low of 453,000 yen posted in August 1992, placing additional shares on the market is likely to significantly weaken the stock's performance.

The Japanese government is not likely to risk any decline of value for a key holding, according to telecom analyst Paul Budde.

"In order to be able to deliver a knowledge-based society, they might have to take some action themselves to make sure the telecom network is there and properly invested," said Budde.

A senior official at UBS Warburg, the brokerage acting as the underwriter for the next NTT share sale, told the Nihon Keizai Shimbun "it would be wiser to postpone the sale until fiscal 2002."