OT/ Nikkei
I'm buying MTF shares and calls, calls up 20% in a few sessions. EWJ is the index fund but looking at some pink sheets also. The CEFs either have a large premium(JOF, 24% premium) or too many exporters (JEQ has a smaller premium <1%).
Faber Sees Nikkei 225 Rising 40% (Update2)
Sept. 15 (Bloomberg) -- Japan's Nikkei 225 Stock Average may climb 40 percent in three years as the government pushes ahead with the breakup of the postal service, releasing $3.2 trillion of savings to banks and insurers, Marc Faber said.
The benchmark may rise to 18,000 in the ``next two to three years,'' Faber, author of the Gloom, Boom & Doom Report, said in an interview on Sept. 13. The Nikkei closed at 12,972.96 yesterday. It rose 1.2 percent to 12,986.78 today in Tokyo, its highest close since June 2001.
``The Japanese share market will strongly outperform New York in the next five years,'' said Faber, who oversees about $300 million at Hong Kong-based Marc Faber Ltd. ``The enormous cash reserves from private households and companies, the money they keep under their mattresses, will flow into the economy.''
Prime Minister Junichiro Koizumi won a landslide election victory on Sept. 11, giving him a mandate to sell Japan Post, whose 350 trillion yen ($3.17 trillion) in assets make it the world's largest savings bank. His Liberal Democratic Party captured a single-party majority in the lower house for the first time since an election in 1990.
``The LDP now has the tools for REAL reform,'' said Mats Sjostrom, who helps manage $450 million at Er Capital Management Ltd., a hedge fund based in Helsinki, Finland. ``International investors will be expecting that to significantly increase allocations to Japan.''
A bill to proceed with the Japan Post sale will be submitted in an extraordinary parliamentary session to start on Sept. 21. Under the government's proposal, a holding company will be formed to manage two companies and two financial service institutions on April 1, 2007. The financial service arms will receive banking and insurance licenses.
`Clear Victory'
Selling Japan Post would put its assets out of reach of politicians who have used its cash to fund public works, boosting national debt. The government projects debt to reach 151 percent of gross domestic product by March 2006, the highest in the industrialized world.
Faber, 59, has invested in Asia since 1973. The self- declared ``contrarian'' became well known for being bearish on Asian assets before the Asian financial crisis in 1997 caused markets in the region, including those in Malaysia and South Korea, to collapse.
His bullish view on Japan is shared by other investors. Fund managers in a Merrill Lynch & Co. survey released two days ago said they were favoring shares in Japan because Asia's biggest economy has the best outlook for corporate earnings.
`Icing on the Cake'
Investors from outside Japan in the five days ended Sept. 2 bought 218.2 billion yen more of the country's shares than they sold, the exchange said Sept. 8. It was the 11th consecutive week that foreigners were net buyers.
``The next year is likely to be very exciting for the Japanese market as continued restructuring by older firms takes place and Koizumi's reforms introduce improved productivity,'' said Paul Heaton, who helps manage $550 million in Japanese equities at Royal London Asset Management in London. Banks, brokers and retailers are ``likely to benefit from improved domestic demand.''
CLSA Ltd.'s Christopher Wood, the top-ranked Asian equity strategist in Institutional Investor's 2005 poll, recommends investors hold shares of companies including Mizuho Financial Group Inc. and Mitsubishi ESTATE Co.
``The fundamental factor is that banks and property are getting better,'' Wood said in a Sept. 12 interview at CLSA's annual investor conference in Hong Kong. ``The election is a positive icing on the cake. This is an enormous personal mandate for Koizumi. He can do pretty much what he wants right now.''
`Very Positive'
Koizumi's administration has pushed construction programs in central Tokyo and cut property-sales taxes in an effort to boost growth. Land prices rose last year in Tokyo for the first time since 1992.
Under Koizumi, banks have made efforts to reduce trillions of dollars in bad debt. The seven biggest banks had 7.4 trillion yen of bad loans at March 31, down from 13.6 trillion yen a year earlier, Japan's banking regulator said in July.
Faber forecast in May 2002 that Japanese stocks would perform better than the U.S. as Japan's economy, the world's second largest, recovered. Since the end of May 2002, the Topix index climbed 17 percent through yesterday, while the U.S. Standard & Poor's 500 Index gained 15 percent.
Japan's economy grew at an annualized 3.3 percent pace in the second quarter, three times the government's initial estimate, as capital spending grew faster than expected, according to figures from the Cabinet Office on Sept. 12.
``I'm very positive regarding Japan's markets,'' Faber said. |
