Companies still have growth prospects

ON JAPAN

Baillie Gifford's John MacDougall says Japanese companies can still grow despite the low growth economy.

The growth prospects for Japanese companies are often dismissed. Investors question how businesses based in a stagnant/low-growth economy, with a shrinking population, can possibly grow profits over the longer term. Clearly it is harder to grow profits in a low-growth environment, particularly for larger, diversified companies. Some of the old conglomerates employing tens, even hundreds of thousands of people, will struggle to grow much above GDP. Also, of the nearly 4,000 companies presently listed in Japan many have dull growth prospects; some are poorly managed with little interest in...