• Home
  • Equities
  • Fixed Income
  • Alternative Investments
  • Multi-Asset
  • Passive
  • Thematic
  • Events
  • Market Intelligence
  • Investment Week
  • ESG Spotlight
  • Thematics Spotlight
  • Newsletters
  • Sign in
    • You are currently accessing Investment Europe via your Enterprise account.

      If you already have an account please use the link below to sign in.

      If you have any problems with your access or would like to request an individual access account please contact our customer service team.

      Phone: +44 (0) 1858 438800

      Email: [email protected]

      • Sign in
     
      • Account details
      • Newsletters
      • Contact support
      • Sign out
     
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Register
  • Events
    • Upcoming events
      event logo
      Women in Investment Festival 2020

      Investment Week, Professional Adviser, Professional Pensions, Retirement Planner and Investment Europe have collaborated to launch the Women in Investment Festival 2020, in partnership with HSBC Global Asset Management.

      • Date: 03 Mar 2020
      • The Brewery 52 Chiswell Street London EC1Y 4SD, London
      event logo
      Milan Forum 2020

      InvestmentEurope's 10th annual Milan Forum will take place on 5th March at the Four Seasons Hotel, Milan.

      • Date: 05 Mar 2020
      • Four Seasons Hotel Milan Via Gesù, 6/8, 20121 Milano MI, Italy, Milan
      event logo
      Nordic Summit Stockholm 2020

      InvestmentEurope's Nordic Summit 2020 will take place on 10-11 March at the Grand Hôtel Stockholm.

      • Date: 10 Mar 2020
      • Grand Hôtel, Stockholm Södra Blasieholmshamnen 8 103 27 Stockholm Sweden, Stockholm
      event logo
      Frabelux Forum 2020

      The 3rd edition of the Frabelux Forum will be held on Thursday, 19th March at the Ritz Hotel in Paris

      • Date: 19 Mar 2020
      • The Ritz, Paris
      View all events
  • Investment Week
  • ESG Spotlight
  • Thematics Spotlight
Investment Europe
Investment Europe

Sponsored by

Sharing Alpha
  • Home
  • Equities
  • Fixed Income
  • Alternative Investments
  • Multi-Asset
  • Passive
  • Thematic
  • You are currently accessing Investment Europe via your Enterprise account.

    If you already have an account please use the link below to sign in.

    If you have any problems with your access or would like to request an individual access account please contact our customer service team.

    Phone: +44 (0) 1858 438800

    Email: [email protected]

    • Sign in
 
    • Account details
    • Newsletters
    • Contact support
    • Sign out
 
  • Equities

Focus on Asia – Japan, Land of the Rising Equities?

Focus on Asia – Japan, Land of the Rising Equities?
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

This week Investment Europe is focusing on how various asset managers approach investing in Japanese equities. We look first home-ground player Sumitomo Mitsui Trust Bank, and the manager of its equity department Shigeo Mito.

This week Investment Europe is focusing on how various asset managers approach investing in Japanese equities. We look first home-ground player Sumitomo Mitsui Trust Bank, and the manager of its equity department Shigeo Mito.

One argument often mentioned not to invest in Japan is an apparent lack of catalysts to realise equity undervaluations.

Related articles

  • SuMi Trust appoints Yoshio Hishida to spearhead global business development
  • 'Bigger than BlackRock' - Sumitomo Mitsui Trust creates Asia's biggest manager by APAC AUM
  • SuMi Trust launches Japanese equities funds
  • Japan pleases investors with high returns and low correlations

Shigeo Mito (pictured), equity investment department manager at Sumitomo Mitsui Trust Bank, says this has changed.

He points to 20% expected earnings growth this fiscal year. Sumitomo Mitsui expects 25%, but this will vary widely by sector. Materials firms could see 10% growth, while estimates for manufacturing earnings growth are around 30%.

However, this is not yet reflected in prices. Almost three quarters (71%) of companies are trading below book value, and on only one occasion since at least 1990 has this proportion been higher.

The Topix’s price to book ratio (0.89) is lower than for indices including S&P 500, Dax, Cac 40, FTSE 100 and Hang Seng.

“Everyone wants to price in (expected earnings) information, but problems from outside Japan – primarily Europe – mean they have not,” Mito says.

He notes fewer than 10% of Japan’s exports ship directly to Europe, and if the ‘worst case’ happens in Europe, 7% of total Japanese earnings growth will be harmed.

China has now overtaken the EU, and US, as an export destination for his homeland, which is useful as the recurring profit margin for Japan exports to China / ASEAN nations is over double that of their exports to the US.

However, Japan’s fortunes are still linked closely to the US, Mito says, “with some of the 50% of Japanese exports now going to Asia then being forwarded to the US, such as cars.”

Some car makers had offshore manufacturing hit by Thai floods, and exports from this sector is one key theme in Sumitomo Mitsui’s fund.

 

1234
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Equities
  • Asia
  • Equities
  • Japan

More on Equities

Does gating funds harm the European fund industry?

  • ETF/ETP
  • 10 December 2019
Norway's Storebrand subsidiary SPP moves to eliminate all fossil exposure

  • Equities
  • 09 December 2019
Accountability standards questions remain as SMCR comes into force

  • Equities
  • 09 December 2019
EdenTree IM seeks growth in UK wholesale market through appointment

  • Equities
  • 09 December 2019
Tobam launches Swiss equity strategy seeded by local pension fund

  • Equities
  • 09 December 2019
Back to Top

Most read

Swiss regulator proposes sanctions against GAM for not disclosing liabilities
Swiss regulator proposes sanctions against GAM for not disclosing liabilities
Deutsche Bank unveils ESG multi-asset fund exclusively in Spain
Deutsche Bank unveils ESG multi-asset fund exclusively in Spain
Fidelity International appoints global CIO for asset management unit
Fidelity International appoints global CIO for asset management unit
PGIM Investments makes Benelux, Switzerland and UK push
PGIM Investments makes Benelux, Switzerland and UK push
FinecoBank strengthens investment offer through partnership with Columbia Threadneedle Investments
FinecoBank strengthens investment offer through partnership with Columbia Threadneedle Investments
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017