In a challenging global investment landscape, Japan’s powerful growth engine makes a strong case for long and short investing.
Attractive Equity Market
Despite enduring a sustained period of economic stagnation, Japan remains a leading economic power as the world’s third largest economy after the United States and China, with one of the highest GDP per capita in Asia.
Japan has one of the largest and deepest stock exchanges in the world with a broad, highly liquid market that includes companies with long operating track records and fast growing start-ups as well as those that are poorly run. This makes for a strong case for long and short investing.
Japan is changing rapidly, yet its business terrain and culture continues to be both misunderstood and under-appreciated by western institutional investors.
In fact, Japan may be the world’s most underrated equity market with attractive wealth creation potential from a diverse portfolio of strong emerging markets, especially in areas related to Japan’s demographics and economics.
An ageing population, low birth rates and a shrinking workforce are driving an innovation boom in business productivity and heath care, with major developments in big data analytics, software solutions, autonomous and electric vehicles, robotics, pharmaceuticals, franchise and real estate presenting an exceptional opportunity for long-term gains.
Corporate and Economic Reform
Although the country has laboured under weak domestic demand and persistent deflation, the long-term case for investing in Japan remains strong with significant signs of improvement and revitalised optimism by business leaders. Although the Japanese equity market has reflected this to a degree, it remains inexpensive, with the price to book ratio remaining at low levels.