Some comments from Nikkei Net on the general market outlook for Japan:
Thursday, March 30, 2000
Stock Market Outlook: Nikkei Average Behind The Times
TOKYO (Nikkei)--The Nikkei Stock Average and other indexes of Japanese shares are gradually becoming less indicative of the actual state of the market, says P. Nicholas Edwards, who manages Japanese equities for Warburg Pincus Asset Management Co.
It is no longer easy to discern the changes taking place in Japan's society or economy by looking at the indexes as a whole, he says. The shares that represent the "new economy" are companies such as NTT Mobile Communications Network Inc. (9437), known as NTT DoCoMo, Softbank Corp. (9984), and others of their kind.
Fund managers who took an active stance toward their Japanese stock portfolios turned in far better performances than the Nikkei average last year, he notes.
From now on, leadership in the Japanese economic recovery will come from capital investment in information technology, Edwards says. Investors thinking along those lines will continue to buy new economy shares, centering on the IT sector.
Softbank and Hikari Tsushin Inc. (9435) have seen some sharp falls, but technical factors played a large role in those drops, as investors who had bought on margin were forced to sell into the decline. Edwards says Hikari Tsushin's rise was so fast that it seems to have gotten bashed on the way back down.
There are plenty of rumors surrounding Hikari Tsushin, but from a non-Japanese viewer's perspective, there are plenty of points that deserve appreciation, particularly the attention it clearly pays to expanding its market capitalization, Edwards says. Over the medium to long term, its stock price can be expected to rise along with Softbank's, and the current level must be seen as relatively cheap.
There are also old-line companies that are shifting their management stance to emphasize shareholder value, and restructuring to ensure their own competitiveness and survival. This trend can be seen among major electronics makers and trading companies, which also are attractive investment targets, he says.
(The Nikkei Financial Daily Wednesday edition)
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Thursday, March 30, 2000
Stock Outlook: Market To Become Bullish
TOKYO (Nikkei)--The stock market will take on a bullish tone and the Nikkei Stock Average will see a range of 21,000 to 22,000 during the April-June quarter, predicts Yuji Nozaki, a director at STB Asset Management Co.
Institutions will move to make new investments once fiscal 2000 begins, and individuals will continue to pour cash into the stock market via investment trust funds, he says. He also adds that pressure from the unwinding of crossheld shares will recede.
Information-related equities will polarize, Nozaki contends. Investments will flow to issues backed by real earnings, as opposed to Softbank Corp. (9984) and other stocks that have moved up on expectations for the future, he says.
Nozaki recommends the stock of Sony Corp. (6758), NTT Mobile Communications Network Inc. (9437), and companies that manufacture components for mobile communications. He also suggests taking a look at paper and pulp equities because those firms will benefit from the rebound in advertising.
(The Nikkei Financial Daily Thursday edition)
Wednesday, March 29, 2000
Tokyo Stocks Hit 40-Month High On Expected Demand From Funds
TOKYO (Nikkei)--The Tokyo Stock Exchange continued its surge on Wednesday, with the Nikkei Average of 225 issues closing up 332.31 at 20,706.65, the highest since December 1996.
The rise is being mainly attributed to buying by individual and institutional investors who are betting that soon-to-be established investment trusts will push stock demand.
"Money will keep flowing into the stock markets sustaining the Nikkei index above 20,000 even after April," an official at Dai-Ichi Kangyo Asset Management Co. said.
On Wednesday, three Nippon Telegraph and Telephone Corp. (9432) group firms, Sony Corp. (6758) and other information technology issues attracted institutional investors.
Softbank Corp. (9984) and Hikari Tsushin Inc. (9435) drew buying from individual investors gambling on a rebound in technology issues.
Medium or lower priced stocks, including those of raw industrial materials makers, which had been climbing, dipped on profit-taking.
The rise in demand for equities from companies with large market capitalization enabled the broad-based TOPIX to jump 52.08 to 1,732.84, crossing the 1,700 mark for the first time since March 2.
Related Stories:
Pension Funds Expected To Boost Tokyo Stock Market
Individual Investors Seen Piling Into Stocks
Tokyo Stocks Buoyant On Declining Cross-Shareholding Sales
(The Nihon Keizai Shimbun Thursday morning edition)
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