Sat, May 28, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Sparx: Investors are missing a lot of opportunities in Japan

Thursday, July 22, 2010
Opalesque Industry Update – Investors who still think that Japan is a perennially unattractive destination, especially to asset allocators, are missing a good opportunity, says Shuei Abe, chairman of Sparx Asset Management, a Japan-based alternative asset management firm with $32.13m (JPY2.79bn) in AuM.

Abe said during a presentation in Tokyo that better times for Japan are just around the corner, reported newswire Asian Investor.

"Asia is an exciting growth factor. We share cultural similarities. It seems investors have given up on Japan, but will they be right or wrong?” he asked, adding that he believed those people who are leaving the region’s markets are wrong.

The lowest drop in the Nikkei 225 for this decade was recorded in October 2008, and investors remain pessimistic on Japan’s growth prospects. It fell again in 2009 when the Democratic Party won the Lower House seat. At that time, the ratio of the MSCI Japan Index to the MSCI World Index fell below 0.5 to around 0.4, and it continues to remain around that level.

But Abe believed there is opportunity within this pessimism.

He dismissed speculations that Japan’s current economic recovery is only temporary and insisted that the country would be the prime beneficiary of Asia’s growth. He cited statistics which showed that the average corporate sales and recurring profits for fiscal year 2010 are expected to be growth figures of 6.1% and 37.5%, respectively.

Abe’s optimism towards Japan was shared by Sandro Antonucci, Geneva-based vice-president of funds selection at Swiss private bank Lombard Odier. He said last month that despite being unloved by fund managers, Japan’ stocks remain attractive and it is worth having exposure to this market.

At the start of Thursday’s trading, the Nikkei Stock Average lost 0.4% to 9,245.5, while the Topix dropped 0.4% to 825.9, reported MarketWatch. With the U.S. dollar falling into the 86-yen range, Tokyo-listed companies suffered a beating.

News of Federal Reserve Chairman Bernanke’s testifying before the U.S. Congress that the American economic outlook remains “unusually uncertain” sent the Japanese markets, as well as other Asian and Wall Street markets, tumbling, Bloomberg reported today.

Mitsushige Akino, who oversees about $450m in assets in Tokyo at Ichiyoshi Investment Management Co., said that Bernanke’s testimony had disappointed a lot of people, and that investors would shy away from Japanese shares until they feel confident that the Bank of Japan would initiate measures to mitigate against the stronger yen.

Fund managers cut allocations to Japan
A recent survey commissioned by the Bank of America Merrill Lynch (BofA Merrill) showed that fund managers are cutting down their allocations into Japan and the U.S. and instead prefer emerging markets, including China as their new investment destination.

The survey added that global allocators dropped to a net 11% underweight on Japan ending a three-month optimistic period.
-Precy Dumlao

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Performance - Hedge fund ETFs take a battering, Have long-short credit funds delivered?[more]

    Hedge fund ETFs take a battering From ETFStrategy.co.uk: It was a blow for the hedge fund world when Hillary Clinton’s son-in-law Marc Mezvinsky announced he would be closing his Greek-focused fund after it plummeted in value by 90%, just two years after it launched. For passive investor

  2. Americas - Australian banks sending U.S. hedge funds broke, Ryan Puerto Rico ‘rescue’ bill could be windfall for hedge funds[more]

    Australian banks sending U.S. hedge funds broke From SMH.com.au: US hedge funds are not having the best of years. Profits are hard to find, they're underperforming and the punters are losing patience, withdrawing US$15 billion ($20.8 billion) in the March quarter. They're expected to wit

  3. Investing - Billionaire Wilbur Ross likes the look of Chinese bad loans, Hedge funds are still relevant in a diversified portfolio: 4 fundamental criteria for superior manager selection[more]

    Billionaire Wilbur Ross likes the look of Chinese bad loans From Bloomberg.com: U.S. billionaire Wilbur Ross said he’s considering investing in nonperforming loans in China, as Moody’s Investors Service said that the nation has the tools to prevent a financial crisis in the near term. I’

  4. Investing - Blackstone gives pricey Canadian energy and property thumbs down, One of the most concentrated hedge fund bets is getting crushed, Facebook is hedge funds' new tech darling,[more]

    Blackstone gives pricey Canadian energy and property thumbs down From Bloomberg.com: Canada’s energy assets are uneconomic and real-estate markets overvalued, making them less attractive for investment than in the U.S. and elsewhere, according to Tony James, president of Blackstone Group

  5. Study - Only 30% of institutional hedge fund portfolios beat the benchmark[more]

    Bailey McCann, Opalesque New York: A new study from CEM Benchmarking, an independent provider of cost and performance analysis for pension funds, shows that only 30 percent of institutional investors hedge fund portfolios beat the benchmark after fees. The study provides in depth analysis of real