Nintendo shares jump following China console restriction move

<p>Shares in Nintendo rose in value this morning.</p>

The share price of Nintendo rose strongly today (January 8th) after China confirmed it is temporarily relaxing its restrictions on the sales of foreign-built games consoles.

Nintendo is the company behind family games console the Wii and its stocks performed well, increasing by 11 per cent to 15,850 yen on the Tokyo Stock Exchange during today's session.

The firm will be allowed to build its consoles in the recently-launched Shanghai free trade zone and sell them across China, which could result in increased sales for the company.

China is believed to be embracing capitalism in a series of small steps and companies such as Nintendo will be keen to make the most of this, as well as tapping into the rapidly expanding middle class in the Asian nation.

"Nintendo hasn't had a catalyst for a long time, so if it can revive (via) the Chinese consumer market then it would be positive," a Tokyo-based trader told Reuters.

Although sales of the family-friendly Wii console have been good around the world, Nintendo has slipped behind rivals such as Sony and Microsoft in terms of attractive hardcore gamers to use its machines in the last few years.

Weaker yen

Nintendo was also said to be benefiting from a weaker yen, which typically results in a boost to the financial results of major exporters in this part of the world.

In contrast to the positive performance of the share price of Nintendo today, stocks in Sony were down by 0.2 per cent for the day. The company is less reliant on the games consoles market than Nintendo as it also makes products such as televisions and sound systems.

However, Sony's stock outperformed its rival by a considerable amount over the course of 2013, rallying 91 per cent against Nintendo's 55 per cent gain for the 12-month period. Last year saw Sony launch its latest console – the PlayStation 4 – which is up against the Xbox One from Microsoft, which also came out towards the end of 2013.

Learn about the Asian markets and CFD trading at City Index

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.