Nikkei rises to 3-week high on Wall St, higher shareholder returns
* Nikkei rises for a third day * About 40 pct of Topix components trading below book value - analyst * Chiyoda rises on liquefied natural gas project By Ayai Tomisawa TOKYO, May 19 (Reuters) - Japanese stocks rose to a three-week high on Tuesday thanks to Wall Street's record close and a surge in companies announcing higher shareholder returns. The Nikkei share average gained for a third-straight session in midmorning trade, up 0.6 percent at 20,017.23 after rising as high as 20,023.85, the highest since April 28. In the United States, both the Dow Jones industrial average and S&P 500 ended at record highs after tepid housing data raised hopes that the Federal Reserve would hold off on raising interest rates anytime soon. The National Association of Home Builders said that U.S. homebuilder sentiment fell to 54 points in May from 56 in April. "When risk appetite recovers investors start to pay more attention to stock valuations," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center. He said that Japanese shares are seen as cheap with their price-to-book ratio at 1.46, versus 2.78 for U.S. shares and 1.89 for German stocks. "About 40 percent of the Topix components are below their book value, so in the mid-term, people may pick up such stocks," Nakai said. Companies announcing higher shareholder returns remained in the spotlight. KLab Inc rose 2.1 percent after saying it will buy back up to 0.5 percent of shares outstanding, worth as much as 246 million yen. Stanley Electric gained 3.1 percent on its plans to buy back up to 850,000 shares, or 0.5 percent of shares outstanding, worth up to 200 million yen. Chiyoda Corp jumped 2.6 percent after Anadarko Petroleum Corp said it selected Saipem SpA's joint venture with Chiyoda and CB&I as a contractor for the initial development of an onshore liquefied natural gas park in Mozambique. Exporters were mixed, with Toyota Motor Corp rising 0.4 percent, Honda Motor Co falling 1.2 percent and Panasonic Corp gaining 0.9 percent. The broader Topix added 0.5 percent to 1,634.46 and the JPX-Nikkei Index 400 advanced 0.5 percent to 14,776.20. (Editing by Shri Navaratnam)
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