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Japan set for a quick recovery

Of all the world’s major stockmarkets the only one to fall in real terms from the beginning of this year to September 13 has been Japan which, in terms of the Topix Index, fell by 4 per cent but is now recovering.

It is usually wise to invest when stockmarkets are relatively undervalued and I believe this is the case with the Japanese stockmarket where the prospects are now good.

The new Prime Minister looks like following Mr Koizumi’s sensible economic policy. Furthermore, most companies have got over their main problems of over employment, excessive production capacity and too much debt.

There are three main reasons why the market has suffered a set back. They are: hedge funds taking profits from last year, Mr Koizumi upsetting the Chinese and South Koreans by visiting Tokyo’s shrine, which honours the Japanese war dead including war criminals, and the scandal surrounding the internet group Livedoor.

But growth is now forecast at about 2.7 per cent for 2006, the corporate sector has been recovering fairly fast and now there is a steady growth in consumer demand which looks like expanding further.

This will reduce Japan’s dependence on exports. Most analysts estimate about 10 per cent growth in post-tax profits this year and dividends look likely to increase too. All this good news should mean a rising stockmarket.

Some of the funds I like include Baillie Gifford Japan, Baring Japan, Fidelity Japan and Fidelity Japan special situations Japan, Schroder Japan alpha and Schroder Tokyo.

Among the smaller companies funds I like M&G Japan smaller companies, Baillie Gifford Japan Smaller Companies and Melchior Japan opportunities.

Smaller companies funds, in particular, should benefit from increasing consumer demand.


Prime Professions in PI deal for IFAs

A group of former Alexander Forbes directors has set up a professional indemnity brokerage for IFAs.

Prime Professions has been servicing the legal, accounting, construction and insurance professions for a year and is about to target financial services intermediaries.

The firm says it is launching to the IFA community on November 1 to coincide with the renewal date for most IFA contracts.

Prime says it will offer an indication of PI renewal terms without the need to complete a proposal form.
The firm has been added to the panel of brokers for insurance company Chubb.

Prime says it is the biggest threat in the market to rival companies PYV, NCG and First City’s non-network IFA business.

Managing director Duncan Philpott says: “We want to get back to talking to clients and moving away from the old-style values. People’s changing attitudes and a softer market bring the opportunity to make a difference.”

But PYV chief executive Neil Pointon says: “I would have thought that a new underwriter would have brought more value than a new broker. If I was an IFA, I would be very wary of a new firm without a proven book of business.”

The name aim

On October 1 the Association of Investment Trust Companies is becoming the Association of Investment Companies.

Cooper urges lenders to join Homebuy plan

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New pension rules could drive out small Sipp firms

New regulation for personal pensions may drive smaller Sipp providers out of the market due to stringent capital adequacy requirements, according to market commentators. The FSA’s new rules are set to come into force next April after the regulator got feedback on its consultation paper earlier this year. The rules require Sipp providers holding client […]


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