Jacob,
with so much money potentially coming from Japan, it is scary to think how high the US markets can go. Just like real estate, foreign investors, especially Asians, are notoriously famous for arriving late to the party such as the famous Rockerfeller Center deal. But this is just the beginning. It is mind-boggling if ML, MS, Pru etc manage to wrestle 10% of the massive Japanese savings over here, where are they going to put the money? Are we going to see S&P 500 hitting a PE of 40 or higher?
Ramsey
TOKYO (Nikkei)-Mitsui Trust & Banking Co.'s (8401) alliance with
Prudential Insurance Co. of America, announced Wednesday, reflects
an ongoing trend of tie-ups between Japanese and foreign financial
institutions seeking to capitalize on new opportunities in the Japanese
market for investment trusts.
As in the case of the Mitsui-Prudential collaboration, foreign financial
institutions bring expertise in asset management and product
development, while Japanese firms offer domestic sales networks for
marketing investment trusts.
Both Japanese and foreign financial institutions are eager to tap into
the financial assets of individual Japanese investors - a
1.2-quadrillion-yen pool.
"During this period of change and financial deregulation, we believe it
is an ideal time to get involved in the Japanese market," Arthur F. Ryan,
chairman and CEO of Prudential, said Wednesday.
Ryan called the planned joint venture with Mitsui Trust an effort to
merge Mitsui's existing sales network with Prudential's global strength
in asset management.
Japan's Big Bang financial deregulation will allow banks to sell
investment trusts directly and opens the way for the creation of
pension plans similar to the 401(k) schemes in the U.S.
The deregulation also affords a prime opportunity for foreign financial
institutions that have an edge in asset management and product
development to cultivate Japanese customers. Indeed, that concept
prompted Prudential to approach Mitsui Trust regarding a possible joint
venture.
For domestic financial institutions, alliances with foreign partners will
help them expand their business with individual customers - an
increasingly important segment.
(The Nihon Keizai Shimbun Thursday morning edition) |
