Improving US economic fundamentals have marginally offset the heightened geopolitical concerns in Russia/Ukraine and Israel/Gaza, leading to the sell-off in risk-free assets in July.
Asia Pacific ex-Japan markets outperformed their global counterparts, bolstered by strong price returns in China and Hong Kong which were up 7.3% and 6% in USD terms respectively.
As part of its growth strategy, the Japanese government has proposed strengthening corporate governance. The proposal aims to enhance the profitability of private sector firms and ultimately to improve the economic lot of the general population.
The Japanese market for IPOs is booming once again. Following the collapse of Lehman Brothers and the global financial crisis, the number of IPOs in Japan went into decline. However, after new listings hit bottom in 2009, they have gradually recovered, with increases in the number of IPOs in each of the last four years.
The Japan Exchange Group, which runs the Tokyo Stock Exchange (TSE), announced on 7 August that the composition of the JPX-Nikkei Index 400 will change for the first time since the index was created in January of this year.
US high-yield funds, both exchange-traded and mutual funds, have seen heavy outflows in July with almost USD 10bn of outflows in the month, according to Standard Chartered Bank Weekly Fund Flows reports.
Domestically produced goods and imported finished consumer goods both rose mildly MoM. This must be causing much doubt at the BOJ about achieving the 2% Core CPI target.
As for the entire Eurozone, its trade surplus in goods and services remains near record highs, but it is not increasing further, so it is no longer supportive of GDP growth.
Regarding our long-standing theme of rebalancing in the Eurozone, recent trends have been more negative, so we offer this summary with some relevant charts.
Last month we described Japan’s “Show me the Money” corporate governance as regards the sharp rise in corporate profit margins to new highs. This theme is paralleled by the trend in dividend payments.
During the Federal Open Market Committee (FOMC) meeting in June, the US Federal Reserve (Fed) announced an additional USD 10bn per month in tapering, while keeping the target rate at 0.25%.
Asia Pacific ex-Japan markets performed in-line with global counterparts returning 1.7% in USD terms versus 1.8% for MSCI World.
The plan to lower Japan’s corporate tax rate as part of the government’s growth strategies is attracting a great deal of attention from the markets, but equally important is the government’s initiative to strengthen corporate governance and to change how company managers think about governance.
At an extraordinary meeting on 24 June, Japan’s Cabinet approved a new growth strategy and the detailed policy proposals to implement it.
Soft copies of the semi-annual accounts/reports for the funds mentioned in the investor notice dated 28 February 2019 are available on “Funds” webpage. However, if you are interested to receive printed copies of the semi-annual accounts/reports for the funds that you have holdings in, please contact us at Tel: 1800-535 8025 DID: +65 6535 8025.
The Corporate Sustainability Department that Nikko Asset Management recently established embodies the Firm’s enduring commitment to integrating environmental, social, and governance (ESG) principles in every aspect of its operations.
Since 2013, Nikko Asset Management’s Foreword™ has been delivering world class insights to institutional investors and advisers across the globe.
Soft copies of the semi-annual accounts/reports for the funds mentioned in the investor notice dated 28 February 2018 are available on “Funds” webpage. However, if you are interested to receive printed copies of the semi-annual accounts/reports for the funds that you have holdings in, please contact us at Tel: 1800-535 8025 DID: +65 6535 8025.
Nikko Asset Management New Zealand's Auckland-based fixed income team is responsible for four strategies – New Zealand Cash, New Zealand Bond, New Zealand Corporate Bond and Bond Option.
The fixed income philosophy is that consistent and superior fixed interest returns are best achieved by adopting a diverse range of return generators, implemented in a risk controlled and cost effective manner. Over time, each return generator is expected to add small elements of incremental value, which accumulates to provide consistent and superior results.
Different market environments favour different return generators. By having a diverse range of generators, the portfolio will have a high probability of performing well under all market environments and conditions.
The process is a top-down analysis of medium term economic fundamentals and uses multiple sources of value that are designed to have limited correlation.