Saturday, November 27

Japan, one of the few markets without altitude sickness


The US stock market has appreciated almost 25 percent so far this year (in the case of the S&P 500), a return similar to that recorded by its European counterpart (the Euro Stoxx 50).

These are revaluations that add to the spectacular trajectory that the US markets have experienced since the fateful 2018, a year in which practically all assets closed the year negative.

So, in this context of high valuations, investment professionals are finding it particularly difficult to find bets where potential remains. One of the places where they are finding an alternative is in Japan.

Compared to the rest of the developed exchanges, the main index of the Japanese stock market, the Nikkei, “Only” rises 8.5 percent so far this year, which makes their companies listed at much cheaper prices.

Japan, Credit Suisse’s favorite market

For this reason, the Japanese stock market is right now “the favorite market” of the experts of Swiss credit, according to a recent strategist at the firm, Suresh Tantia.

But Credit Suisse experts aren’t the only ones who have realized Japan’s appeal. In one way or another, Japan comes up in comments and conversations from experts of the sector, so it is not surprising that the country occupies a prominent place in the prospects for next year that are already being finalized by the majority of firms.

Japan comes up in comments and discussions with experts

“We have little geographic bias, with the exception of an overweight to Japanese equities, which could benefit from the global recovery and the depreciation of the yen,” he wrote. Benjamin Melman, Global CIO of Edmond de Rothschild AM, Recently.

The two markets that “appear to offer fair value are Japan and the United Kingdom,” Duncan Lamont, Schroders’ head of research and analysis, noted in another recent comment.

“Geographically, earnings revisions are stronger in Europe and Japan than in the United States, as is the breadth of earnings improvements versus corrections,” he also noted. Alvaro Head, head of UBS AM Iberia.

Also JI drew Maria Luna, from Luna Sevilla Asesores, spoke of the convenience of having a slight exposure to Japan in the portfolios, at the present time. “Japan also has to have it, which is somewhat cheaper due to valuations,” he said in the context of a conversation about strategies to protect itself from rising inflation.



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