Japan Emerges As Promising 2024 Investment Destination: 3 Stocks To Consider
Portfolio Pulse from Surbhi Jain
UBS AG is reinstating its equity strategist role for Japan, indicating a growing interest in Japanese equities. JP Morgan also sees potential in the market. The iShares MSCI Japan Index Fund (EWJ) provides exposure to this market. BlackRock identifies Japan as a beneficiary of global fragmentation and notes the outperformance of companies with low price-to-book ratios. Stocks with low P/B ratios like Nissan (NSANY), Honda (HMC), and Nomura (NMR) have shown strong returns, while those with high P/B ratios like Capcom (CCOEY), Daiichi Sankyo (DSNKY), and Sony (SONY) have mixed performance.
December 20, 2023 | 1:38 pm
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NEGATIVE IMPACT
Capcom Co Ltd (CCOEY) has a high P/B ratio of 5.46 and a modest gain of 4.66% over the past year, which may limit its attractiveness to investors.
CCOEY's high P/B ratio and lower performance compared to its peers could deter investors, especially in a market environment favoring lower P/B stocks.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Daiichi Sankyo Co Ltd (DSNKY) trades at a P/B of 5.04 and has decreased by 15.64% over the past year, potentially making it less appealing to investors.
DSNKY's high P/B ratio and negative performance over the past year could lead to a bearish outlook in the short term, especially given the current market preference.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Sony Group Corp (SONY) has a P/B of 2.37 and a 17.93% increase over the past year, but its relatively high valuation may concern some investors.
While SONY has shown good performance, its higher P/B ratio compared to other highlighted stocks may lead to a neutral short-term impact as investors balance growth with valuation.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The iShares MSCI Japan Index Fund (EWJ) is recommended for diversified exposure to the Japanese equity market, which is gaining interest from major financial institutions.
The positive outlook from UBS and JP Morgan on Japanese equities, along with BlackRock's analysis, suggests increased investor interest which could lead to a rise in EWJ's value in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Honda Motor Co Ltd (HMC) trades at a P/B of 0.59 and has seen a 28.52% return over the past year, suggesting it may be an attractive investment.
HMC's low P/B ratio and high past returns align with BlackRock's criteria for potential value-enhancing measures, which could lead to a short-term price increase.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Nomura Holdings Inc (NMR) has a P/B of 0.60 and a 24.43% increase over the past year, positioning it well for potential investor interest.
NMR's performance and low P/B ratio make it a candidate for further growth, especially with the current positive sentiment towards Japanese equities with such financial metrics.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Nissan Motor Co Ltd (NSANY) has a low P/B ratio of 0.39 and has returned 19.94% over the past year, indicating strong performance and potential for continued growth.
Given BlackRock's positive view on companies with low P/B ratios and NSANY's strong past performance, the stock is likely to attract investor interest and potentially increase in price.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 90