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30 | Market research
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Jun Kim, Fortis Investments' Investment effectively became a single party democracy. each stock by Internaxx clients over the
Specialist for Japanese equities is less Indeed, expectations may be unrealistically previous year. This report is not a
optimistic about corporate earnings. "Much high. Kim: "Even if the DPJ cannot solve all of recommendation to buy or sell these stocks.
like their US and European counterparts, the economy's structural problems, they are
Japanese companies have improved their bringing in a fresh breath of new economic
results by cutting costs and rationalising proposals, particularly for small and medium-
Top 10 September 2009
processes. Sustainable growth, however, can sized businesses and to rejuvenate domestic
Top 10 Buy Top 10 Sell
only come from higher sales," he says. consumption. After half a decade, the LDP
1 Citigroup Bank of America
Nor is Kim confident that the higher sales has become stale and run out of ideas to
2 Bank of America Citigroup
will be generated within Japan's domestic stimulate the economy."
3 CIT Group CIT Group
economy, "Consumers have tightened their Though Kim is seeing strong inflows into
4 General Electric ArcelorMittal
purse strings, stronger sales can only come Asia as a whole, he believes that many market
from increased exports, which is why participants may be caught off guard by the
5 Rio Tinto Rio Tinto
Japanese equities have followed US and extent of the recovery in Japan's equity
6 ArcelorMittal Palm Inc
Chinese macroeconomic data lock-in-step," markets. "Japanese equities were depressed
7 Palm Inc Allianz
he explains. Japan is one of the most highly even before Lehman's collapse, and then fell
8 Lloyds Lafarge
export-dependent economies among in tandem with other equity markets. What
9 Total Total
industrialised countries. was already undervalued is now excessively
10 Lafarge Barclays
Nevertheless, he does expect that when a undervalued. Most investors have been
global recovery occurs, Japan will be a key underweighting Japan for so long, they no DISCLAIMER
beneficiary. The economy's disproportionate longer even look at the economy. When a This document has been prepared solely for
reliance on exports means that it will enjoy a rebound finally does occur, they may miss informational purposes and does not constitute
rebound in exports that much more. out," he says. an offer to buy or sell, or a solicitation of an offer
Another factor supporting Japanese to buy or sell any security or financial
equities of late are hopes that the Democratic Internaxx Top ten buys and sells instrument, or any investment advice. Prospective
Party of Japan will overthrow the Liberal –International Investors Activity investors should conduct such investigations as
Democratic Party in the 30 August elections. summary from Internaxx deemed necessary and should seek their own
The incumbent has held power for most of legal, accounting and tax advice to determine
the last fifty years, rendering the political The 2008 Top Ten buys and sells are measured independently of the suitability and consequences
scene in the country almost stagnant in what as the total number of trades carried out in of an investment.
September 2009 Investment International www.investmentinternational.com
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