In good company: Strong balance sheets offer Japanese firms resiliency during downturns

Deep Dive into Japanese equities

clock
Junichi Takayama of Nikko Asset Management
Image:

Junichi Takayama of Nikko Asset Management

The Covid-19 pandemic has triggered changes in Japan that would have taken many years to initiate in less turbulent times. We believe there is significant value to be unlocked under such circumstances.

The pandemic has forced Japan to adapt to new norms overnight. Before, many segments had been caught in inertia under a risk-averse culture. However, risks from inertia now outweigh risks from implementing change as the 'new normal' dramatically transforms the corporate operating environment. Undervalued Japanese stocks Currently, 49% of the 2,000+ companies represented by the TOPIX index trade below book value, compared to 11% in the S&P 500 and 20% in STOXX Europe 600 index (see Figure 1, right). Firstly, the market still has some distance to go before recovering to pre-pand...

To continue reading this article...

Join Investment Week

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Asia

Ken Wotton and Brendan Gulston, co-managers of the LF Gresham House UK Multi Cap Income fund

Five rules for resilience amid rocky markets

Barrage of headwinds

Ken Wotton and Brendan Gulston
clock 04 August 2022 • 5 min read
Chris Hutchinson of Unicorn Asset Management

The Big Interview: What I learned after being dropped from Hargreaves Lansdown's Wealth Shortlist

'I’ve no interest in falling out with people'

clock 04 August 2022 • 6 min read
Darius McDermott, managing director, FundCalibre

FundCalibre elite radar: ASI Global Smaller Companies

'Good contender'

Darius McDermott
clock 01 August 2022 • 4 min read
Trustpilot