When you take into account stocks going ex-dividend, the Nikkei spent the first half of the day trading in a tight range with cautious overnight markets and renewed radiation fears keeping investors hesitant. It was the second half that caught most people’s attention, but we wondered why the markets were on the move. …
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This publication is for professional clients and financial advisers in Continental Europe only. It is not intended for and should not be distributed to, or relied upon, by the public. All opinions and forecasts expressed are those of the authors as of 15/03/2011 and are subject to change without notice.
Several reasons being thrown around were government buying, year-end window dressing, factories coming back on-line and Tepco calming radiation fears. It was clear however that the street was not seeing any particular pick up in buying. As the Nikkei approached 9,500, conviction was lacking and the recent “highbeta” unwind seemed to be capping any attempt to move above this level. Some interesting strength was seen across some of the beaten up tech names (Sharp +5.1%, Pioneer +4.3%, Casio +5%), but it still doesn’t feel like Japan is out of the woods yet. All eyes are on whether the nuclear crisis is now under control before we can start chasing some alpha. Investors are still trying to gauge the true impact of the damage caused by the earthquake and tsunami, Tankan on Friday should give us a better idea.
Value Strategy
According to the Transport Ministry almost 90% of major land, sea and air transportation networks in TOHOKU area have been restored. Ports have reopened and the traffic on the Tohoku Expressway which reopened on 24th March is at 37,200 vehicles a day which is up 30% from levels prior to the earthquake. This is encouraging for Family Mart. It is one of the largest convenience chain store operators and one which we hold in our portfolio. In fact, Family Mart had to stop the operation of 108 shops out of 585 in TOHOKU on the 18th March and today the number of non-operating shops has decreased to 48 shops. The delivery of goods to the shops it operates is going well without any major problem according to our analyst. Reflecting this situation, the share price of Family Mart has recovered to almost the same level before the earthquake. Regarding investment trades, we are not making any material changes today. However we continue to reduce the holding in Tokyo Electric Power.
Advantage Strategy
Regarding Advantage strategy, we are not making material changes to the portfolio. We continue to analyse the portfolio positioning and adjust the portfolio weights slightly to insure relative attractiveness with the portfolio’s higher free cash flow yield. We maintain our conviction in the current holdings from a long term perspective.
Small/Mid Growth Strategy
As for Japan Small/Mid Cap Market, we think that the technical rebound has finalised and that volatility will decrease. From now on the market is expected to discount the earnings condition for FY2011. We are building up positions in internet stocks and electronics/machinery with strong growth drivers.
Important Information
This publication is for professional clients and financial advisers in Continental Europe only. It is not intended for and should not be distributed to, or relied upon, by the public. All opinions and forecasts expressed are those of the author(s) and are subject to change without notice. Data as at 15/03/2011, unless otherwise stated. This document does not form part of any prospectus. This document contains general information only and does not take into account individual objectives, taxation position or financial needs. Nor does this constitute a recommendation of the suitability of any investment strategy for a particular investor. Whilst great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes or omissions or for any action taken in reliance thereon. There is potential for increased volatility in emerging stock markets, and only a modest proportion of investable wealth should be invested in them. Past performance is not an indication of future performance provides no guarantee for the future and is not constant over time. Any reference to a ranking, a rating or an award provides no guarantee for future performance results and is not constant over time. Investing in funds focused on specific themes, particular areas of the market or small capitalisation companies may increase the risk associated with them due to the volatility and/or the concentrated nature of these investments. Investors should read the fund simplified and full prospectuses for specific risk factors and further information. This document is by way of information only. It is not intended to provide specific investment advice including, without limitation, investment, financial, legal, accounting or tax advice, or to make any recommendations about the suitability of the fund(s) for the circumstances of any particular investor. You should take appropriate advice as to any securities, taxation or other legislation affecting you personally prior to investment. Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations. www.invescoeurope.com This document is issued in: Austria by Invesco Asset Management Österreich GmbH, Rotenturmstrasse 16-18, A-1010 Wien. France by Invesco Asset Management S.A., 18, rue de Londres, F-75009 Paris, which is authorised and regulated by the Autorité des marchés financiers in France. Germany by Invesco Asset Management GmbH, An der Welle 5, 60322 Frankfurt am Main, which is authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht in Germany. Switzerland by Invesco Asset Management (Schweiz) AG, Stockerstrasse 14, CH-8002 Zürich.
Fonte: ETFWorld -Invesco
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