Japan Economic Insight

James Dowey, Chief Economist, and Paul Caruana-Galizia, Economist

The conventional wisdom is that following a roughly 50 per cent rise in the stock market in 2013 in Yen terms, the Japan trade is over and done*. So the story goes, those big gains were due to a one-off boost from quantitative easing (QE) and a depreciation of the Yen — policies that one should think of as a palliative to Japan’s economic weakness, but not a cure. Rather the cure, and by implication the necessary condition for a longer-term investment case, is deep structural reforms — a painstaking re-weaving of Japan’s economic and social fabric, no less. The story continues: this is a much tougher test than launching a blast of QE, and one that prime minister Shinzo Abe, although well intentioned and well supported by the public thus far, is likely to fail. Stick a fork in Japan, it’s done…continue reading

Visit the Neptune Japan Opportunities Fund Page.

Visit neptunebigideas.com for more market views and comment from Neptune.

*Lipper, in Yen with net income re-invested. Past performance is not a guide to future performance.

James Dowey and Paul Caruana-Galizia are economists at Neptune Investment Management


Important Information: This is not for retail clients. It is intended for investment professionals and is not for forward
transmission.

Please remember that forecasts are not a reliable indicator of future performance. Any views expressed within this communication are those of Neptune as at the date of issue. We do not undertake to advise you as to any changes in our views. The information and statistical data contained in this article has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness.

Neptune funds are not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason, the comparison index should be used for reference only. 

Neptune funds may have a high volatility rating and past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and your clients may not get back the original amount invested.

Neptune funds may invest more than 35 per cent in government and public securities in a number of jurisdictions. The information provided is a general summary and is for information purposes only. This should not be taken as a recommendation to advice to purchase or sell any investment. It does not form part of any contract for the sale or purchase of any investment. Neptune does not give investment advice and only provides information on Neptune products.

Recommended

Equity-release-house-home-700.jpg
2

Report calls on Government to run equity release for cash-poor pensioners

A report published today has called on the Government to launch its own equity release scheme, offering additional retirement income for pensioners. The report from Cass Business School and the International Longevity Centre says equity release backed by the Government could help asset-rich but cash-poor consumers. It calls for the creation of a ‘UK Equity […]

Protection

CPD: Protection

The latest edition of Newsbrief counts as 1 hour of structured CPD and covers the regulatory and marketplace changes that took place during May 2014. Visit the Money Marketing CPD Centre to answer 10 multiple choice questions and complete this CPD activity. Just click into your CPD Plan and you’ll find each month’s marketplace changes round-up in your activity list.

Huw_Evans
8

Will George Osborne’s guidance guarantee collapse under the weight of demand?

The Association of British Insurers has warned Chancellor George Osborne his Budget guidance guarantee could face “ObamaCare”-style capacity issues if demand for the service is high in April next year. Speaking during a debate at the ABI’s headquarters in London this morning, ABI director of policy Huw Evans said the trade body favours guidance being […]

HM-Treasury-500x320.jpg
5

Providers call on Government to ‘tear up the rule book’ on annuity income

Pension providers have called on the Government to relax rules on annuity product design in the wake of Chancellor George Osborne’s radical retirement overhaul. Responses to the Treasury’s consultation on the Budget reforms have largely focused on the controversial guidance guarantee due to be introduced in April 2015. But MGM Advantage, Aviva and Just Retirement […]

Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment