London Calling
U.K. manager comes back from Tokyo a bull
By NEIL A. MARTIN
AMERICAN INVESTORS HAVE LARGELY MISSED the 30% rally in Japanese stocks since the market hit a 21-year low in March. Kathy Matsui, Goldman's equity strategist in Tokyo, noted that, during a recent research trip to the U.S., "of the more than 30 institutions we met, only nine had neutral or overweight positions." Apparently, she concluded, many American investors are "uncertain" about whether Japan is at "the beginning of a secular bull market or the end of another bear-market rally."
European investors, in contrast, "tend to be 'structurally underweight' in U.S. shares," she adds, which means "they have to be more fully weighted elsewhere, such as Asia, including Japan." While skepticism remains about efforts to cure Japan's structural problems, "we've found very few European investors who deny the fact that valuations are supportive for investing in Japan," she adds. "And, so far, we haven't found many bears."
Rowan Chaplin, who just finished a two-week trip to Tokyo, visiting some two dozen companies -- many of whose stocks are among the $1 billion of Japanese equities he and his colleagues oversee for ISIS Asset Management in London -- also sees growing interest in this market.
"Japan is just now coming back on the radar screens of some investors but we have been watching it for the past six or seven months and believe there are some good opportunities coming in view," Chaplin says.
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