PSigma's Becket says Japan could leap by 40%
PSigma chief investment officer Tom Becket plans to move to a more overweight position in Japan across the firm’s funds.
He says the potential for acceleration in earnings’ power and margins in Japanese global exporters will improve with a weakening yen, which he expects to see over the next two years.
He says: “The prospects of Japanese companies are underestimated and I think people are missing an opportunity in Japan. If we can see a return to how the economy was before the earthquake, the Japanese market could easily go up by 40 per cent over the next year.
“In our fund of funds, 7.2 per cent of a 50 per cent equity weighting is in Japan. I could easily estimate our equity weighting in the fund of funds to be 20 per cent of equity exposure in Japan and so a 10 per cent absolute weighting. That exposure will be almost exclusively through exporting businesses.”
BestInvest senior investment adviser Adrian Lowcock says: “The earthquake and tsunami in Japan will not affect the fundamentals of the country in the long term.
“The resulting recession will weaken the currency and make Japanese exports more competitive and therefore will inc-rease companies’ profits. Investment will still be attractive in the long term.”