The situation in Japan illustrates the extent to which a country’s path towards net zero is subject to constraints.
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Japan – Subarashii Desu
Reasons to be cheerful
With mounting overseas investor interest and a stock market that is trading, in yen terms, at 30-year highs, we review our optimistic December 22 Japan thesis, Sugoi Desu Ne (enclosed). The conclusion remains the same. A once in a generation transfer of wealth from corporates to shareholders remains a multi-year investment thesis with attractive valuations. Critically, this is supported by the recent intervention from the Tokyo Stock Exchange (TSE) over corporate governance directive as the final piece of the strong investment story.
Looking to the Rising Sun
This article was first published in Le Temps of 8 May 2023.
While Japanese equities were popular with Swiss asset managers in the late 1980s, the world’s 4th largest economy has now all but disappeared from our portfolios. Perhaps the time has come to turn our sights back to the Rising Sun, because after a long stock market winter, Kabuto-Cho could be in for a bright new dawn.
Impressions on the Re-opening
After 3 years, China has finally reopened its doors to foreign travelers. Alice Wang, manager of a Chinese and ex-Japanese equity strategy at Quaero Capital, has just returned from a 3-week trip to China. In the following text, she shares her impressions, sometimes anecdotal, based on numerous meetings and visits throughout the country.
SVB in default … What now?
A few lines to revisit the Silicon Valley Bank (SVB) event in particular, and also the other Category IV US banks (banks with a total balance sheet of less than USD 250 billion) notably First Republic Bank, Signature Bank, PacWest Bancorp, and Alliance Bancorp.
Asia – 2023 Outlook
We continue to be cautious on the rest of the world ex-China this year and highlight our key themes ex-China recovery: we do believe that USD has peaked, and that more geopolitical tension as well as central bank buying will be good for precious metals. We also believe that some commodities, such as copper, are more exposed to a China recovery, and that commodities on the whole have suffered from under-investment in the past decade. For the first half of the year, we park most of our ex-China exposure in metals as we wait for better opportunities in the second half of the year. We have a few idiosyncratic theses scattered around the region, but we err on the side of caution as flows back to China can impact even solid companies elsewhere, particularly the outperformers from last year.
What are the prospects for New Europe?
The ongoing conflict in Ukraine and its repercussions remain the primary theme impacting investment decisions in the region. This consists both of the factors impacting global markets, but also, more nuanced regional only influences.
China: 2023 Outlook
This year may be starting off well for the Chinese market, but it is not starting off well for Mr Xi. People are quietly seething at the rapid pace of reopening, both on account of the lack of psychological and medical preparedness, and also – why go to all the effort of zero-COVID for two years if herd immunity is the only solution in the end?
Japan: Outlook for 2023
Our outlook for 2023 on the Japan can be summarized in 6 major trends:
WEBINAR | Asiatische Aktien (ohne Japan) – Strategie: Der Xi-Schwenk
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