Thu, Sep 3, 2015
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. Cliff Asness attracts $360 million as liquid alternative funds hold up[more]

    From Bloomberg.com: As U.S. stocks suffered their worst month in more than three years in August, Clifford Asness’s managed futures fund was able to profit. Investors are taking notice. The $9.12 billion AQR Managed Futures Strategy Fund pulled in an estimated $360 million in net subscriptions last

  2. Opalesque Exclusive: When the SEC calls, fund managers need to get out of their own way[more]

    Bailey McCann, Opalesque New York: New pressure is hitting alternative investment funds from all angles. So far this month both hedge fund and private equity players have seen enforcement actions, and subsequent fines over fees, disclosures, and misleading statements. Citi one of the biggest

  3. Performance - Einhorn and Loeb's hedge funds both decline 5% in August, Some target-date funds miss in the market turmoil[more]

    Einhorn and Loeb's hedge funds both decline 5% in August From Reuters.com: Hedge fund billionaires David Einhorn and Daniel Loeb saw their main funds lose roughly 5 percent in August during a dramatic market sell off, two people familiar with their returns said on Monday. Einhorn's

  4. Fortress hedge fund manager David Dredge says markets trouble on the way[more]

    From AFR.com: David Dredge of global hedge fund Fortress has built a career studying, predicting and protecting against the world's major financial crises. The recent convulsions in global sharemarkets are "just the beginning" of a painful adjustment as money drains from the emerging market economie

  5. North America - Puerto Rico agency plans talks with hedge fund creditors[more]

    From WSJ.com: Puerto Rico’s Government Development Bank is planning to begin confidential debt-restructuring talks with hedge funds that own its bonds as early as next week, said a person familiar with the matter. The parties are set to discuss a plan under which the investors would lend additional

 

banner