Been reading that quiet a few reputable strategists and fund mgrs are saying that Japan’s the place to be.They include Byron Wien of Blackstone Advisory Services and Edinburgh-based Martin Currie.
Two related reasons are the large sums of cash held in Japanese bank deposits and the changing attitudes of depositors towards equity investments. This cash could set the stage for a domestic stock rally. True these are old arguments, but they could finally happen this time. After all the Japanese have elected a non-LDP government. The LDP had been in power since the late 1950s except for a few months in the 1980s.
Another reason is managements’ new focus improving corporate governance and return on equity. The focus used to be on market share and everybody except shareholders.
Then there are the strong balance sheets of companies. Japan is also exporting more to China and the rest of Asia, and less to the US.
Finally there is issue of relative valuations. FT reports,”Michael Katz of Glenrock Global Capital Partners says he likes Japan on a relative basis. The market is priced for “every known calamity” and clearly is not a momentum play for those looking to make a quick buck.
‘For those seeking value, if not Japan, what?” he asks. “Look around the world today and you’d find countries that depend on government largesse to keep themselves going. Stock markets are in their own little world. ””
Err last bull point puts me off: when someone talks of relative values, I tend to rush to the toilet.
Good Easter break.