ING IM sees attractive stocks in Japan

With valuations of equity in Japan close to an all-time low, ING Investment Management says local stocks look attractive.

Bruno Springael, senior investment manager, Global High Dividend at ING IM said: “Regionally, there is value to be found but one must be cautious. Japan is likely to offer value and we have seen encouraging signs in emerging markets in Asia and Latin America, with inflation moderating and growth numbers not as negative as first feared. “

“However, North America’s economy is showing no signs of improvement, despite recent positive developments in the labour and housing markets, and its currently relatively rich valuations mean an increased risk of market underperformance.”

Equity prices across the eurozone are already discounting the bad news, while the weaker euro is actually helping exporting companies, Spingael said, while in contrast the UK and Switzerland are being hit by currencies that are relatively strong against the euro.

Springael added: “In terms of stocks, the second quarter swayed towards cyclical sectors, such as industrials, IT and consumer discretionary, and away from consumer staples, financials and cash.”

“US equities were the winner in H1, rising by 11% – 2% of which can be attributed to the weak performance of the euro. Japan, meanwhile, advanced 7% but the weaker yen brought the return in euros down to 6% growth. Europe, thanks to a strong June, ended the half up 5%.”

 

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