The author’s intent is not to be misleading, but rather to be as frank as possible, regarding the longstanding debate of whether or not Japanese stocks are truly undervalued. In short, the answer is no. I no longer believe Japanese stocks are undervalued, not to the extent that I once did, and not to the [...]
Archive | Valuation
RSS feed for this sectionRecession confirmed in Japan — tell us something we don’t know
No need to get excited over the fact that the Japanese economy has now contracted two consecutive quarters (no shooting the messenger). That was largely already factored into equities, thus explaining the severely depressed levels registered of late. However, as The Economist reported in its latest edition, the “Toyota shock” of a sharp decline in [...]
More detail on impact of cross shareholdings in a bear market
See the clip below (re. cross shareholding) from an article discussing Japanese stocks at a 26-year low (as of Monday’s close) in yesterday’s Wall Street Journal. Earlier this week I discussed cross shareholdings in Poisonous cross shareholdings may be helpful in reaching a quicker bottom. clipped from online.wsj.com Japan’s banks, in particular, had seemed to [...]
UPDATE: Poisonous cross shareholdings may be helpful in reaching a quicker bottom
Media reports and eventual confirmation (by Mitsubishi UFJ) of contemplation of raising capital among Japan’s mega banks warrants far more discussion. As stated earlier, the reasoning of MUFJ (JP: 8306) [[MTU]] is understandable (growth at almost any cost), but unacceptable for existing shareholders. For Mizuho (JP: 8411) [[MFG]] and Mitsui Sumitomo (JP: 8316), however, it [...]
Nikkei and TOPIX, then and now
After the market close on Friday, the Nikkei published a table showing various metrics of such things as where the Nikkei 225, TOPIX-1, yen, and JGBs are trading now versus 5 1/2 years ago (April 28, 2003) when the N225 hit a post-bubble trough (note we’re about 40 points away from that bottom and early [...]
Gains unsurprisingly erased in Tokyo; patient buyers needed
Japanese stocks “rallied” a spectacular 14% last Tuesday, but in spite of that (and being surrounded by massive days of selling), I lacked the broader market’s bullish conviction and explained why in “Trying not to rain on the Tokyo stock parade.” Overnight, the Nikkei sold-off about 6.8% to fall back below 9,000 again to 8,674, [...]
Perfect storm slams Japanese equities
First, no wonder there are no domestic buyers of stocks — not only is there widespread fear and distrust of capital markets, but also, after years of experiencing deflation, there’s unfortunately no urgency to buy something that may only become cheaper. That said, someone needs to set a floor on prices. The spread between the [...]
Financials bolster Nikkei; Stocks to go ex-dividend
Japanese bank stocks are grabbing more headlines these days as they continue to scavenge around wounded U.S. i-banks. Nomura (8604) [[NMR]] added some more Lehman [[LEH]] human capital (in Europe/ME after snagging its Asian ops) and Sumitomo Mitsui FG (8316) (SMFJY.PK) is said to be considering making an investment in Goldman [[GS]]. Investors responded particularly [...]
A Tale of Two Banking Systems
Wilbur Ross made an interesting comment at an Invesco seminar in Tokyo on Thursday, stating that Japan’s financial system has never been healthier — even (historically) compared to the U.S. No further details were provided by financial press coverage in Japanese, but it is fairly obvious that the Japanese were primarily (although marginal) customers of [...]
Tokyo reopens: Nikkei, Topix shed 5%
So much for enjoying the latter part of the three-day weekend in Japan. The spectacular “Bloody Sunday” was followed by sell-off Monday in the global markets that were open, which in turn set up Japanese stocks for a heavy drop upon reopening Tuesday. The Nikkei 225 hit a 3-year-plus intra-day low of 11,551, going back [...]
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