View the article online at http://citywire.co.uk/wealth-manager/article/a744387
AAA-rated Hideo Shiozumi: Japan isn’t even halfway through its bull market
by Robert St George on Apr 03, 2014 at 07:20
Japan’s Topix index surged more than 50% in yen terms last year, which Shiozumi (pictured) attributed to the first two ‘arrows’ of Abenomics – fiscal stimulus and monetary easing.
‘The first two arrows have already produced good results,’ Shiozumi said. ‘That’s why last year the market was up sharply.’
However, Shiozumi argued that the next arrow of structural reforms would not yield such instant results.
‘I think the third arrow of growth based on structural reforms could take about two to three years. Of course, structural reforms will have to be accompanied by some short-term pain.’
Shiozumi therefore estimated that Japanese equities would return 10-15% this year and next, which he regarded as a somewhat conservative prediction.
‘If during the second half of this year the economy is not so adversely affected by the consumption tax increase and economic growth is higher than people are expecting, then of course the market could become much stronger than I am expecting.’
Shiozumi said the structural reforms would begin to pay off in 2016, which he suggested could be an even better year for Japanese equities than 2013.
‘In 2016, the fourth year of Abenomics, we should see more clear signs of Abenomics working successfully.’ As indicators pf success, Shiozumi said he was looking for inflation to exceed 2% and a nominal GDP growth rate of more than 3%.
‘So I think we could see an even stronger market in 2016, stronger than last year.'
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.
More about this:
Look up the funds
Look up the fund managers
More from us
- AA-rated Taylor: Japanese reboot only at startup stage
- The Japan fund GAM's A-rated Hepworth backs to exploit 'Abenomics'
- Performance review: why Saunderson House is sceptical on Japan
- JO Hambro launches Japan divi fund for AA-rated McGlashan & Nash
- Aubrey's Dalrymple: we expect to make significant money in Japan