business

Japan's trust banks net buyers of Japanese shares for 10 months

7 Comments
By Ayai Tomisawa

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And pension funds have been rewarded so far. The Nikkei benchmark has nearly doubled since late 2012, partly on their purchases. But some analysts warn that the trading value of the Tokyo cash market has fallen since hitting a high in November following a surprise central bank easing and GPIF’s allocation change. They also caution that other investors, such as foreigners, have not been aggressive buyers because of doubts Abe has eradicated the threat of deflation.

Precisely. The trust banks, as well as pension funds, Kampo, etc., as the article says, have all been buying more stocks of late. So, naturally, the Nikkei has risen. But, as this quote highlights, that could just be a "bubble" of their own creation, and, unless the fundamentals underpinning the Japanese economy improve, stocks could easily go the other way. Especially since foreign investors have not jumped on the band wagon. Maybe we should not pop the cork of the champagne just yet.

-3 ( +3 / -6 )

Japanese institutional investors will usually "Buy High and Sell Low". Just like in 1988-1989, 1996-1997, 1999-2000, 2006-2007. This is part of the culture; by the time everyone agreed and implement the execution...almost all the factors are already factored into the market. Abenomics has been around for more than 2 years and the market have been up for 7 years. Major Japanese players play an open-poker hand for everyone to see. Pity the Japanese pensioners....depleted by poor returns over-time and now by inflation in various ways because of weak Yen in past 2 years. (And the official inflation indicator understates the actual inflation experienced by consumers).

1 ( +1 / -0 )

Nothing else for them to buy now BoJ buys most JGB's and Japanese companies not issuing tons of debt.

0 ( +0 / -0 )

The extra yen the government has been printing has to be going somewhere, the situation in America is not far different. We keep hearing that companies are "sitting on record amounts of cash". But what isn't mentioned is that this is only true because a record amount if money now exists in the system. In America, the money supply has been increased by 140%. The amount of money held by companies and banks relative to the total amount of money extant is not different than before; sales and growth are still stagnant, the only thing which gas grown is the money supply.

The stock markets in Japan and America have fueled almost almost all of their recent growth by others borrowing from the central banks at low interest, and using the money gained to buy stocks. Certainly, almost no companies listed on the exchanges have seen their net sales and revenues grow enough to justify the current value of their shares. Once again, this increase in share prices reflects only the amount of money in the system, not economic growth or performance.

-2 ( +1 / -3 )

Certainly, almost no companies listed on the exchanges have seen their net sales and revenues grow enough to justify the current value of their shares. Once again, this increase in share prices reflects only the amount of money in the system, not economic growth or performance.

http://news.tv-asahi.co.jp/news_economy/articles/000043969.html

TSE First section (880 companies listed), yielded the highest operating profit ever in FYE 3/14.

-1 ( +1 / -2 )

TSE First section (880 companies listed), yielded the highest operating profit ever in FYE 3/14.

Wow, you mean the quarter before the sales tax increase? How about the last three quarters?

-1 ( +1 / -2 )

Wow, you mean the quarter before the sales tax increase? How about the last three quarters?

http://www.asahi.com/articles/ASH2F3RRWH2FULFA00F.html

It looks to surpass the FYE 3/14 according to SMBC Nikko Securities estimates.

-2 ( +0 / -2 )

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