Investment analysts upbeat on Japan, cool on China

Investment strategists speaking at a DBS Private Bank outlook seminar on Monday, July 15, 2013, said that Japan's stock market and the yen could be significantly boosted by "Abenomics" - the slate of economic measures recently unveiled by Prime Minis
Investment strategists speaking at a DBS Private Bank outlook seminar on Monday, July 15, 2013, said that Japan's stock market and the yen could be significantly boosted by "Abenomics" - the slate of economic measures recently unveiled by Prime Minister Shinzo Abe (above) - and political reforms that are around the corner. -- FILE PHOTO: REUTERS

After many years of being out of fashion, Japan is now a hot investment destination again.

Investment strategists speaking at a DBS Private Bank outlook seminar on Monday said that Japan's stock market and the yen could be significantly boosted by "Abenomics" - the slate of economic measures recently unveiled by Prime Minister Shinzo Abe - and political reforms that are around the corner.

"If I had one bet to make, I would make it Japan," said Mr Yu-Ming Wang, the international chief investment officer of Nikko Asset Management, adding that he has done so already, by leaving Hong Kong to move to to Tokyo six months ago.

"What is wrong with Japan is fundamentally a lack of confidence because you had so many political changes and administration turnover and people basically put their cash under their mattresses," he said.

However, with an election coming up that looks likely to keep Prime Minister Shinzo Abe in power, political stability is on the horizon and the government will likely be able to implement real and lasting political reforms, he added, and this will encourage Japanese citizens to channel their cash into assets.

The analysts at the event were rather more downbeat on China.

"We're in slightly unknown territory in China right now," said Fullerton Fund Management chief executive officer Manraj Sekhon.

"The new leadership has come in, they have a social and political agenda which have yet to be fully revealed, the financial system is going through a lot of stress, the export market has dried up for reasons we are familiar with."