The FSA Spy market buzz – 1 November 2024
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
Japan’s economy has been growing for six consecutive quarters. Such a prolonged period of growth has not happened since 2006. Moreover, economists expect positive earnings revisions of Japanese companies in the near future.
Japanese equities are now supported by a positive macroeconomic backdrop, according to Rob Weatherston, Old Mutual Global Investors’ Hong Kong-based portfolio manager of the Old Mutual Japanese Equity Fund.
The positive macroeconomic backdrop is attributed to Japan’s prime minister Shinzo Abe’s “three arrows”: monetary easing, fiscal stimulus and structural reforms.
“Valuations are relatively attractive and investors should continue to benefit from improving corporate governance, one of the main successes of Abenomics,” said Andrew Rose, manager of Schroder Japan Growth Fund, as reported in FSA’s sister publication Expert Investor.
In order to capitalise on the economic growth and positive sentiment, on 25 September Abe called for a snap election, which will take place on October 22, a year ahead of schedule.
Don Yew, Singapore-based analyst for manager research at Morningstar, said value-oriented stocks in Japan have come back in favour since 2016. Earlier, growth stocks outperformed the broader Japan equity markets.
Against this backdrop, Yew compares two large-cap Japan equity products: the AB FCP I – Japan Strategic Value Portfolio Fund and the Nomura Japan Strategic Fund.
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
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