Perspectives Blog

Does Japan’s sell-off present buying opportunities?

Daisuke Nomoto, Senior Portfolio Manager | February 10, 2014

What’s behind the Japanese stock market’s recent correction? What’s ahead for Japan’s stock market, currency and government policy? Why the risk/reward tradeoff looks attractive at current price levels Abenomics has already had a bigger impact on the Japanese economy and financial assets than the failed attempt at quantitative easing between 2001 and 2006 (see chart). Inflation has moved back into positive territory, and household income is ri…

Tokyo Olympics — another driver to get out of deflation?

Daisuke Nomoto, Senior Portfolio Manager | September 13, 2013

Tokyo has been chosen to host the 2020 Summer Olympics, with an estimated economic benefit of at least $30 billion. Hosting the Olympics could bring a wide range of implications to Japan on top of the mere economic impact, including strengthening Prime Minister Abe’s leadership. The next announcement to watch for in the near term is the Japanese government’s decision how quickly they will increase the consumption tax rate. Tokyo has been chose…

Harvesting a New Moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 23, 2014

Companies with competitive strengths still intact should have positive profit growth once adaptive change gets underway. The ability to control cost is essential to surviving the growth slowdown in Asia Pacific ex Japan. We do not just need companies to be adapted; we also need them to be positioned for adapting. A New Moderation in Asia In my previous article, I argued that conditions are in place for the slowdown in Asia to evolve into a sus…

The beginnings of a new moderation in Asia

Soo Nam Ng, Head of Asian Equities | June 2, 2014

…hat are the implications for corporate Asia in the current growth slowdown, and the opportunities going forward should it evolve into more moderate yet sustained growth? Third, how should investors position in Asia Pacific ex Japan equities in view of the transformation that is taking shape in the next five to 10 years? These are the questions we will explore in a series starting with the big picture conditions. According to Ben Bernanke, the Gre…

Special report – 2014 mid-year review and outlook

Columbia Management, Investment Team | June 16, 2014

…caught many investors off guard. In our view, declining interest rates reflect renewed pessimism about the global economic recovery, as well as easy monetary policy from the Federal Reserve, European Central Bank and Bank of Japan. Outlook: The U.S. economy has made considerable progress in the five years since the recession ended. Inflation, unemployment and broader measures of labor utilization have all moved closer to the Federal Reserve’s ta…

Emerging Markets: Waiting on exports

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | March 31, 2014

…orld is recovering, but it has been a weak recovery. U.S. growth has not broken out of the 2%-3% range, the eurozone is no longer contracting but expectations are for growth of only about 1%, and there are questions regarding Japan’s ability to sustain any growth rebound with the advent of the new consumption tax. Global growth has simply not been strong enough to support high demand for EM exports. The question is whether a continuing gradual re…

When the QE tide recedes, focus on what is revealed

Robert McConnaughey, Director of Global Research | January 6, 2014

…and the foot-draggers such as France. However, unlike the U.S., aggregate profit margins are well below prior peaks and valuations remain fairly forgiving, leaving room for upside against that backdrop of lower expectations. Japan, having suffered through almost two decades of malaise, has reasserted itself on the global stage with the bold economic policies that have become known as “Abenomics.” Abenomics has been described as having “three arr…