Japanese Nikkei jumps 2.3% after a sharp wave of losses

Addis Holding Company's net profit decreased by 55.8 percent during the third quarter of 2026, reaching 94.87 million riyals ($25.3 million), compared to about 214.57 million riyals ($57.2 million) in the same period in 2025.

On a quarterly basis, Addis’ net profit declined by 26.2 percent, compared to about 128.53 million riyals ($34.27 million) in the second quarter of 2026.

The company said in a statement published on the Saudi Stock Exchange “Tadawul” website, today, Monday, that the decline in net profit on an annual basis is due to the impact of the temporary suspension of some operations, the increase in depreciation and interest expenses, in addition to incurring non-recurring insurance expenses.

In contrast, the group’s revenues increased by 34.8 percent to reach 2.23 billion riyals ($593.3 million), compared to about 1.65 billion riyals ($439.9 million) in the same period of the previous year. The company attributed this growth to the contribution of the Shelf fleet in current markets, in addition to the increased contribution of its production model in obsolete fields, and the contribution of Saipem excavators following the completion of the acquisition deal.

During the first nine months of 2026, the company’s net profit decreased by 23 percent to 459.84 million riyals ($122.62 million), compared to about 597.33 million riyals ($159.29 million) in the same period of the previous year.

Elon Musk, CEO of Tesla, said that the company will have to return deposits to a large number of customers who ordered the Cybertruck electric truck. Due to the orders far exceeding its production capacity, following the company’s announcement, last week, of its intention to reduce truck production at its factory in the US state of Texas, in preparation for stopping it.

Musk wrote, in a post on the “X” platform, on Monday: “We will seek to produce the largest possible number of trucks before closing the production line, in about eight months, but we will have to return deposits to a large number of people,” according to “Reuters.”

Musk's statements come after he announced that Tesla will add an additional production shift to meet the accumulated orders for the Cybertruck, before dismantling its production line next year to make room for increased production of the self-driving taxi, the Cybercab.

On Friday, Musk announced that the cessation of truck production will begin in mid-2027, with the resources allocated to it transferred to the production of “CyberCap”, which represents a major focus of the company’s ambitions in the field of self-driving.

Tesla began delivering Cybertruck trucks in late 2023, but demand for them was much lower than Musk's expectations. Its sales in the United States declined by 48 percent to 20,237 units last year, according to data from Kelley Blue Book, a level far below Musk’s previous expectations that annual sales would reach 250,000 trucks.

The Japanese Nikkei index rebounded strongly during trading on Monday, supported by the recovery of technology stocks, after a sharp selling wave that pushed the market into the bearish zone, while Japanese households’ appetite for government bonds reached record levels, amid expectations that domestic debt returns are approaching their peak.

The Nikkei index rose by 2.33 percent, closing at 58,775.50 points, recovering part of its 6 percent loss on Friday, which pushed it to decline by more than 20 percent from its record level recorded in June.

The broader Topix index also rose by 2.97 percent to 3,818.16 points, in a session that witnessed an increase in the shares of 208 Nikkei component companies, compared to a decline of only 17 companies, which reflects the broad scope of the recovery.

Technology is driving the market recovery

The rise in Japanese stocks came as an extension of the recovery of American technology companies at the end of last week, after shares of “NVIDIA” and “Tesla” recovered some of their sharp losses.

The US Nasdaq index rose by 1.1 percent on Friday, while the Standard & Poor's 500 advanced by 0.3 percent, with some concerns receding about tightening control over artificial intelligence and slowing spending on data centers.

But Takuma Ikemoto, an analyst at Tokai Tokyo Intelligence Laboratory, warned of continued concerns about American policies. Pointing out that stock gains may face difficulty in continuing after the initial buying wave subsides.

The consulting company "BayKarnet" topped the list of gainers, rising 8.8 percent to a record closing level, followed by "Shimizu" by 7.7 percent, and "Mitsubishi Electric" by 7.3 percent.

On the other hand, Japan Tobacco shares fell by 15.95 percent, recording the lowest close since October 2025, after Russia seized the company’s assets within its territory.

Mitsui Chemicals shares also declined by 8.48 percent, and Tokyo Fudosan Holdings shares declined by 4.45 percent.

Record demand for government bonds

In parallel with the recovery in stocks, Japanese Ministry of Finance data revealed that sales of government bonds allocated to individuals rose to a record level of 8.19 trillion yen, equivalent to about 51.77 billion dollars, since the beginning of the current fiscal year.

Sales surpassed the previous annual record of 7.27 trillion yen, set during fiscal year 2005.

The data showed that November issuances doubled compared to October to 2.03 trillion yen, of which 5-year fixed-return bonds accounted for 65 percent, compared to 18 percent for 10-year variable-return bonds.

This shift reflects the desire of Japanese families to stabilize high returns, after government bond yields last month reached their highest levels in decades.

Katsutoshi Inadomi, chief strategist at Sumitomo Mitsui Trust Asset Management, said that fewer investors expect interest rates to continue rising, which enhances the attractiveness of 5-year fixed bonds.

Bets on the approaching peak of interest

The November issuance interest for 5-year fixed bonds is 2.39 percent, compared to about 2.05 percent for 10-year variable bonds, a difference of 0.34 percentage points, which is the largest since July 2007.

Yields in the December issues are scheduled to decline to 2.17 percent and 1.85 percent, respectively.

This comes after the Bank of Japan announced in October that it had succeeded in achieving the inflation target of 2 percent, amid widespread expectations that the key interest rate would be raised to 1.5 percent in December.

A Reuters poll showed expectations for further increases, reaching a final level of between 1.75 and 2 percent.

Rinto Maruyama, a strategist at SMBC Nikko Securities, said that the proximity of five-year fixed bond yields to the expected final interest level may have prompted investors to prefer stabilizing the current yield.

The increasing demand indicates a gradual shift in the behavior of Japanese savers, who hold about $7 trillion in low-yield bank deposits, with the increasing attractiveness of government bonds as a savings alternative.

While gains in stocks reflect improved risk appetite, record demand for bonds reveals a parallel trend to take advantage of higher yields before the end of the monetary tightening cycle.