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Wysłany: Pon 18:37, 02 Wrz 2013 Temat postu: 5 Reasons Investors Shouldn't Bail on Japan-spun3 |
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5 Reasons Investors Shouldn't Bail on Japan
Usually once the Japanese economy makes headlines, it's for all the wrong reasons. The country's public debt-to-GDP ratio clocks in at 225 percent than three times as high as that of the United States. Japan has been trapped in a deflationary struggle for decades, and its economy is unseen signs of recovering in the near future, especially in the aftermath of last week's earthquake and tsunami, and amid concerns about a damaged nuclear plant. But despite its hardships, Japan continues to be a legitimate force on the planet economy, and many trade partners, such as the United States and China, depend on exports from a range of Japanese companies. News Score.]
Crises breed overreaction. Before Friday, the last big earthquake hit Japan in January 1995. Six months following the quake, the Nikkei 225 Index was down 25 %,[link widoczny dla zalogowanych], according to Bespoke Investment Group. But towards the end of the year, the index regained all its losses. When it comes to major market-moving events like natural disasters,[link widoczny dla zalogowanych], investors generally sell first and ask questions later. "You also have to look at special situations where fear and greed creep in as potential opportunities,[link widoczny dla zalogowanych], because usually the pendulum swings a little bit too far another way,[link widoczny dla zalogowanych]," says Christian Magoon, CEO of asset management consultant firm Magoon Capital. Keep in mind, however,[link widoczny dla zalogowanych], the 1995 quake's damage didn't incorporate a nuclear plant.
Pro-business government. Late this past year, Pm Naoto Kan announced that Japan will cut its corporate tax rate the greatest on the planet 5 percentage points, right down to 35 percent. "[The government is] doing everything they are able to to help Japanese companies,[link widoczny dla zalogowanych]," says Neil Hennessy, chief investment officer for Hennessy Funds,[link widoczny dla zalogowanych], which includes two Japan-focused funds under management. The financial institution of Japan has additionally taken a hostile role in trying to create liquidity in the Japanese market by buying up countless vast amounts of dollars' worth of Japanese securities. "Both sides of the aisle are working toward fixing what's broken now in Japan,[link widoczny dla zalogowanych]," Hennessy says.
It's cheap. Before the Nikkei Index's massive sell-off now, Hennessy says the nation's stocks were cheap from a valuation standpoint. Based on his price-to-sales ratio estimates, Japan is all about three or four times cheaper than its BRIC counterparts fast-growing markets of Brazil,[link widoczny dla zalogowanych], Russia,[link widoczny dla zalogowanych], India, and China.
[See The Case for (And Against) European Stocks.]
Audrey Kaplan, manager of the Federated InterContinental Fund, which in fact had about 15 % of its assets committed to Japan by the end of February, is cautiously optimistic. "If we're able to acquire some resolution around the nuclear situation, the sell-off could be a very attractive opportunity to buy,[link widoczny dla zalogowanych], and that we would consider shifting from neutral to overweight [in Japan],[link widoczny dla zalogowanych]," she says. "We're just looking for additional clarity."
Will still be the earth's third largest economy. While we're not forecasting stellar growth for Japan soon, it still remains the world's third largest economy, behind america and China. Before the earthquake hit, the International Monetary Fund expected japan economy to develop by only 1.6 percent this year. (The United States, however, is expected to develop by 3 percent.) But this natural disaster comes at any given time once the global economy has turned the corner. "On the positive side, we were inside a strong global recovery," Kaplan says. As the fallout in the nuclear reactors is still yet to be determined, "there has not been permanent harm to the economic base," she says. The likes of Toyota have temporarily shut down manufacturing plants, however these may be short-term setbacks.
Japanese companies rely on exports. It's important to keep in mind that the Japanese economy is primarily driven by its exports. Whenever you take a look at Japanese companies,[link widoczny dla zalogowanych], Hennessy says,[link widoczny dla zalogowanych], "Remember you aren't investing in the Japanese economy,[link widoczny dla zalogowanych], you're investing in global companies that are actually located in Japan." Slow development in Japan's domestic economy doesn't necessarily result in low returns for the country's stocks.相关的主题文章:
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