Equity

Investment Insights by our experts and thought leaders

Global Investment Committee Outlook 2019: Tempered Positive View

So many developments have occurred since we last met in September, but the major ones were the surprising collapse in oil prices mostly due to geopolitical factors, the U.S.-China trade and BREXIT conflicts becoming increasingly intractable, and that aspects of the global economy showed occasional signs of moderation.

Asian Equity Monthly Outlook - December 2018

The MSCI AC Asia ex Japan (AxJ) Index gained 5.3% in USD terms in November, despite persistent concerns over global growth and a slide in technology stocks.

From the Australian Equities Desk - November 18

The S&P/ASX 200 Accumulation Index returned -2.2% during November.

Global Equity Quarterly Report - Q3 2018

How do you react when you see blood; do you swoon or just observe with intrigue? Perhaps conditioned by a recent overdose in crime related dramas (favourites include: ‘Killing Eve’, ‘Peaky Blinders’ & ‘Better Call Saul’), it was the latter outcome for me after a recent DIY debacle with a saw.

Asian Equity Monthly Outlook - November 2018

The MSCI AC Asia ex Japan (AxJ) Index fell by 10.85% in USD terms, on the back of concerns about rising interest rates, slower economic growth, and persistent US-China trade tensions. Large technology stocks were particularly hard hit.

Japan Equity Monthly - November 2018

The Japanese equity market dropped in October, with the TOPIX (w/dividends) falling 9.41% and the Nikkei 225 (w/dividends) declining 9.04% on-month.

Trump Will Hate These Buybacks

Clearly, the U.S. Administration has tried to protect the steel and other industries considered important for defense and economic security. The intent is to have them invest in new capacity due to the recently higher product prices.

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

From the Australian Equities Desk - October 18

The S&P/ASX 200 Accumulation Index returned -6.1% during the month.

Asian Equity Monthly Outlook - October 2018

The MSCI AC Asia ex Japan (AxJ) Index fell by 1.38% in USD terms in September. The Sino-US trade conflict and rising oil prices were key drags on performance. During the month, the US Federal Reserve raised rates for the third time this year as widely anticipated, amid positive economic data.

Japan Equity Monthly - October 2018

The Japanese equity market rose in September, with the TOPIX (w/dividends) climbing 5.55% on-month and the Nikkei 225 (w/dividends) rising 6.17%.

From the Australian Equities Desk - September 18

The S&P/ASX 200 Accumulation Index returned -1.8% during the month.

From the Australian Equities desk - August 18

The S&P/ASX 200 Accumulation Index rose 1.4% during the month.

August 2018 Australian Reporting Season: The Good, The Bad, and The Oddly

Confession season was eerily quiet leading into reporting season, unlike the noise from the Royal Commission and the incredible events out of Canberra, where another Prime Minister didn’t reach their full term.

The Nikko AM Australia Approach to Value Investing

Nikko AM Australia values companies based on their sustainable earnings capacity. That is, we determine the intrinsic value by capitalising the sustainable or mid-cycle earnings of every stock under coverage.

Asian Equity Monthly Outlook - August 2018

The MSCI AC Asia ex Japan (AxJ) Index edged higher in July as losses in China and Korea were offset by gains in India, the Philippines, Thailand and Malaysia.

Japan Equity Monthly - August 2018

The Japanese equity market rose in July, with the TOPIX (w/dividends) climbing 1.30% on-month and the Nikkei 225 (w/dividends) rising 1.12%. Stocks started the month lower amid anxiety over intensifying trade tensions between the US and China.

Recent moves by the Chinese government to further liberalize its fund management industry have generated a lot of interest with some observers projecting that China will overtake the UK to be the second-largest asset management market.

Global Equity Quarterly Report - Q2 2018

Spain is worth paying attention to - it is the second most visited country in the world (in terms of international tourists), behind France, and also generates the second highest tourist receipts globally behind the USA.

Australian Equity Monthly Outlook - August 2018

The S&P/ASX 200 Accumulation Index rose 1.4% during the month. The Australian equities market underperformed global equity markets in July led by a fall in resources. Developed markets outperformed emerging markets for the fourth consecutive month.

Uncovering Value in Japanese Equities

Global equity markets rallied throughout 2017 without any major setbacks. With volatility at extreme lows, it could be said that 2017 was an unusually fortunate year for market participants in terms of risk and reward.

Asian Equity Monthly Outlook - July 2018

The MSCI AC Asia ex Japan (AxJ) Index fell by 4.8% in USD terms amid persistent concerns about trade tensions between China and the US.

Japan Equity Monthly - July 2018

The Japanese equity market was mixed in June, with the TOPIX (w/dividends) falling 0.76% on-month and the Nikkei 225 (w/dividends) climbing 0.65%.

Asian Equity Monthly Outlook - June 2018

The MSCI AC Asia ex Japan (AxJ) Index closed -1.3% in USD terms as markets turned more risk averse amidst macro uncertainties, trade tensions and higher oil prices.

House View: Global Economic Rebound And Equity Reflation

Despite uninspiring global equity performance in the last three months, at least for USD-based investors, Nikko AM’s Global Investment Committee continues to be positive on global equities on a one-year view, particularly those in Japan, Europe and the Asia Pacific, but remain unenthusiastic on global bonds.

Japan Equity Monthly - June 2018

The Japanese equity market declined in May, with the TOPIX (w/dividends) dropping 1.67% on-month and the Nikkei 225 (w/dividends) falling 1.18%.

China MSCI Inclusion Has Room to Grow

The much anticipated MSCI A Share inclusion happened on 31 May 2018 and will pave the way for further internationalisation of China’s stock markets.

Thoughts From the Journey

It has often been the conversations I have had with the people along the way which I have found most helpful when it has come to making investment decisions. This article aims to tell some of their stories and how apparently chance encounters can help generate investment ideas.

Asian Equity Monthly Outlook - May 2018

The MSCI AC Asia ex Japan (AxJ) Index gained 0.7% in USD terms. Trade jitters receded following China’s commitment at the Bo’ao Forum to further open up the economy to foreign businesses.

Japan Equity Monthly - May 2018

The Japanese equity market rose in April, with the TOPIX (w/dividends) climbing 3.55% on-month and the Nikkei 225 (w/dividends) rising 4.73%.

China Brands Muscle MNCs Out of Home Turf

Chinese companies are now a force to be reckoned with on their home turf – a market which used to be dominated by foreign brands. This report looks at how the change has come about and where Chinese brands are headed.

Asian Equity Monthly Outlook - April 2018

The MSCI AC Asia ex Japan (AxJ) Index declined 1.5% in USD terms, amid significant volatility across global markets. Concerns about a global trade war and a sell-off in the US tech sector weighed heavily on sentiment.

Japan Equity Monthly - April 2018

The Japanese equity market fell in March, with both the TOPIX (w/dividends) and the Nikkei 225 (w/dividends) dropping 2.04% on-month.

How ASEAN's 3Rs Can Overcome Trade Wars

Our portfolio manager in Singapore explains why ASEAN might well benefit from the current US-China trade tensions and how the region’s three main strengths should keep economic growth strong.

China's Move from Factory of the World to Silicon Valley of the East

With its advantages of a vast talent pool, financing and market access, China has most of the ingredients needed to transform into the “Silicon Valley of the East”

Forbes: Revisions Show U.S. Industrial Mini-Recession In 2015

Actually, it has not been one long expansion since 2009, as we now can see how the slumping oil price caused a mini-recession a few years back.

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

House View: Continued Global Economic and Equity Reflation

Our updated view remains positive on the global economy and equity markets even as global bond yields rise a bit further. Our SPX target remains near 3000 by year end, with impressive gains elsewhere too.

Asian Equity Monthly Outlook - March 2018

The MSCI AC Asia ex Japan (AxJ) Index declined 5.0% in USD terms, as better US economic data prompted worries about inflation and expectations of faster interest rate rises from the Federal Reserve.

Japan Equity Monthly - March 2018

The Japanese equity market fell in February, with the TOPIX (w/dividends) dropping 3.70% on-month and the Nikkei 225 (w/dividends) tumbling 4.41%.

Japan Equity Monthly - February 2018

The Japanese equity market rose in January, with the TOPIX (w/dividends) climbing 1.06% on-month and the Nikkei 225 (w/dividends) rising 1.47%.

Asian Equity Monthly Outlook - February 2018

The MSCI AC Asia ex Japan (AxJ) Index returned 7.6% in USD terms in January, amid optimism about solid economic growth and corporate earnings. Asian currencies generally strengthened against the USD.

MSCI Inclusion of Domestic ‘A’ Shares is China's Grand Entrance onto World Stage

Imagine a day when "Asia ex-China" portfolios are the norm. We think this is not too far-fetched an idea.

2018 Japan Equity Outlook

With the Nikkei Index breaching the 24,000 mark, its highest level in 26 years, Japan appears to have put its “lost decade” of growth well behind it.

Asian Equity Monthly Outlook - January 2018

The MSCI AC ex Japan (AxJ) Index returned 2.7% in USD terms in December, outperforming the MSCI AC World index which returned 1.4%.

From freezing the bubble to a beautiful China

A flying visit into China post the 19th Party Congress seemed like a good idea. I got the sense that post the conference, visibility and direction over the next five years was reasonably clear. But it is more difficult to hold a similar view for 2018.

Japan Equity Monthly - January 2018

The Japanese equity market rose in December, with the TOPIX (w/dividends) climbing 1.57% on-month and the Nikkei 225 (w/dividends) rising 0.32%.

Will Plan Sponsors Be Ready for China A Shares?

China has not yet been fully incorporated into indices, creating a mismatch and a unique challenge to investors in navigating this new world order.

From the Asian Equity Desk - Market Outlook 2018

The MSCI AC Asia ex Japan (AxJ) Index returned 38.0% in USD terms year-to-date, on the back of a broad-based economic recovery. The Index outperformed the MSCI World Index, which rose 20.8% in USD terms in the same period.

Asian Equity Monthly Outlook - December 2017

The MSCI AC Asia ex Japan (AxJ) Index returned 0.6% in USD terms in November. The index approached ten-year highs during the month on expectations of continuity in US Federal Reserve policy and robust economic data, but gains were pared at month-end by a sell-off in technology heavyweights.

Shale to the Chief: Can US Shale Oil Keep Up the Growth?

Having recently returned from the US, Stefan Hansen, Senior Research Analyst at Nikko AM Australia, shares his thoughts on US shale oil production and the potential impact on the oil price.

Japan’s “Show Me the Money” Corporate Governance

The implications of a surprising decline in non-manufacturers’ profit margin.

In 2018, our key focus is to produce and maintain alpha in stock selection. Looking back, the year of 2017 has indeed been a year of strong expansion in terms of equity performance and this has brought much cheer to investors.

Asian Equity Monthly Outlook - November 2017

The MSCI AC Asia ex Japan (AxJ) Index returned 4.7% in USD terms in October, outperforming the MSCI World Index which returned 1.9%.

Japan Equity Monthly - November 2017

The Japanese equity market rose in October, with the TOPIX (w/dividends) climbing 5.45% and the Nikkei 225 (w/dividends) rising 8.16%.

New Zealand's New Centre-Left Government Makes for Uncertain Times

Just as politics in other developed countries have recently taken on a more populist and/or anti-capitalist tone, so too has New Zealand’s.

Abe’s New Bull Market in Equities and Home Values

The Case for Abenomics and global reflation leading to a TOPIX level of 2500 in two years’ time.

Japan Equity Monthly - October 2017

The Japanese equity market moved upwards in September, with the TOPIX (w/dividends) climbing 4.34% on-month and the Nikkei 225 (w/dividends) rising 4.28%.

Asian Equity Monthly Outlook - October 2017

The MSCI AC Asia ex Japan (AxJ) Index fell by 0.1% in US dollar (USD) terms, underperforming the MSCI AC World Index which returned 2.2%. Profit-taking and currency weakness relative to the USD pressured returns in September.

House View: Global Economic and Equity Reflation Despite Less Dovish Central Banks

Despite geopolitical risks and less dovish central banks, the Global Investment Committee remains moderately optimistic about the global economy and equity markets, while being cautious on global bonds.

Developed Asia-Pacific: Growth Dynamics in Asia-Pacific – Crucial Differences in the Region

Given the shifting dynamics in the region, for investors interested in Asian equities, there are multiple options depending upon the level of risk they are willing to assume. This paper looks at the outlook for several countries in Asia-Pacific.

Japan Equity Outlook: “Investing in Japan vs. investing in Japanese companies”

Investing in Japan is not the same as investing in Japanese companies. Given the increase in their overseas exposure, we believe it is a good time to revisit opportunities in Japanese companies.

Asian Equity Monthly Outlook - September 2017

The MSCI AC Asia ex Japan (AxJ) Index rose by 1.3% in US dollar (USD) terms, outperforming the MSCI AC World Index and bringing year-to-date returns to 31.1%. This was the eighth straight month of positive returns.

Japan’s “Show Me the Money” Corporate Governance

The release of the second quarter data on aggregate Japanese corporate profits confirms my twelve-year theme about improving corporate governance in Japan and how investors should not worry about the slow domestic economy.

Reforming India

Our equity portfolio manager who specializes in India concludes that reforms should have a very positive effect on that country’s growth.

Forbes: Why Global Equity Markets Are Ignoring Political Disorder

“Global investors and corporations should adhere to the model that political spats are no reason to get overly frightened or paralyzed.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Asian Equity Monthly Outlook - August 2017

The MSCI AC Asia ex Japan (AxJ) Index rose by 5.3% in US dollar (USD) terms, outperforming the MSCI AC World Index and bringing year-to-date returns to 29.4%.

Japan Equity Outlook: “Work style reform”

We think Japanese companies are poised for a pickup in capital expenditure, led by productivity enhancing investments.

Japan Equity Outlook - July 2017

In a survey conducted by the Nikkei in March 2017, 80% of respondent companies indicated that they were either planning or considering the implementation of productivity enhancing investments.

Equities and Income in an Ageing World — Why Dividends Matter

The ageing world presents significant savings and productivity challenges to this and subsequent generations of investors and workers. Change will no doubt remain a constant, as it has been throughout the last two centuries in particular.

Asian Equity Monthly Outlook - July 2017

The MSCI Asia ex Japan (AxJ) Index rose by 1.6% in US dollar (USD) terms. Year-to-date (YTD), the index returned 22.8%, outperforming MSCI World by over 12%.

Improving Japanese Shareholder Returns Ahead

Our top Japanese Equity staff, including our CIO, report on how Corporate Governance remains on a strong upward trend, which should boost alpha for active managers and beta for the overall market via improvements in ROE and shareholder distributions.

Japan Equity Outlook - June 2017

In the Japanese equities market, high dividend strategies have significantly outperformed other strategies. We believe that – in a low growth, low interest rate environment where investors yearn for yield – these strategies will continue to outperform.

The Global Investment Committee remains moderately optimistic about the global economy and equity markets, while being cautious on global bonds.

China A-Shares: A New Milestone

Following four years of intense consultation and three failed attempts, MSCI has just added China A-Shares into its international indices. We view this as expected and in some ways, long overdue.

Asian Equity Monthly Outlook - June 2017

MSCI Asia ex Japan (AxJ) gained 4.7% in USD terms, outperforming the MSCI AC World and MSCI Emerging Markets Indices.

Forbes: Japan's “Show Me The Money” Corporate Governance

“Last night’s release of the first quarter data on aggregate Japanese corporate profits confirms my twelve-year theme about improving corporate governance there and how investors should not worry about the slow domestic economy.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Japan Equity Outlook - May 2017

We believe inflation will pick up gradually in the second half of 2017, in which case the rational expectations of Japanese consumers are likely to shift towards anticipation of even higher inflation.

How would a Korean crisis impact Japan?

While highly unlikely, we examine the potential impact on Japan of a major crisis on the Korean Peninsula.

Forbes: What Was Japan's Bubble Like In 1989?

“Japan's example should always provide a guide to investors to be wary of arguments that surges in risk assets to high valuations based upon huge monetary and fiscal policy stimuli, coupled with excessive confidence, even if long-lasting, are acceptable.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Asian Equity Monthly Outlook - May 2017

MSCI Asia ex Japan (AxJ) was up another 2.2% in USD terms, outperforming the MSCI AC World. All AxJ markets ended higher in April.

Japan in Motion: What does the future hold?

We believe that Abenomics is working, however we feel that its success cannot be determined by viewing government policy frameworks in isolation.

Forbes: Why The Yen Should Not Strengthen In A Crisis

“Any major crisis in the Northeast Asian region, especially one involving a crisis within Japan’s borders, is likely to be handled very aggressively by the Bank of Japan (BOJ), with it bending the rule-book as much as the Fed did during the Global Financial Crisis or as the ECB has done in the past five years.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

View on the French Elections

Our team of our Portfolio Managers in London, one of whom hails from France, reviews the prospects and ramifications of this weekend's French election.

“We all have heard of the term 'interest rate repression' for how central banks have kept rates at ultra-low levels, but this has only been successfully maintained due to what I call 'inflation repression.'”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Value Investing now back in favour — Will this continue?

During the 2016 December quarter, we witnessed the value style stage a partial recovery after having underperformed for at least two years or so. Is this as good as it gets? Or will value continue to outperform after its initial recovery, after having being in the wilderness for some time?

China started 2017 with real momentum, following the property driven debt-fuelled stimulus of last year, and the blue skies a result of Government directives to curb pollution during March’s Central Government meetings. However, with an expectation of lower steel intensity sectors driving growth this year, what will this mean for Australia’s resource sector?

Asian Equity Monthly Outlook - April 2017

MSCI Asia ex Japan (AxJ) was up 3.3% in USD terms, outperforming MSCI AC World. All Asian markets rose over the month, with gains led by India and Korea.

House View: Continued Economic and Equity Reflation

The Global Investment Committee remains optimistic about global economy and equity markets despite their recent strong equity rallies and increased political risks.

Move over OPEC, there is a new commodity cartel in town... China

China has had a significant impact on the supply side in two key global commodities during 2016. Going forward, look out for further actions from China on the supply side of commodities.

Asian Equity Monthly Outlook - March 2017

MSCI Asia ex Japan (AxJ) was up 3.4% in USD terms, marginally outperforming MSCI AC World. Absolute returns were positive for all AxJ markets except the Philippines.

Singapore Equities 2017 - The Year of Expansion

In line with our market outlook going into 2017, we previously observed the prospect of attractive opportunities emerging during the year.

Asian Equity Monthly Outlook - February 2017

Asia ex-Japan (AxJ) equities returned 6.2% in US Dollar (USD) terms, outperforming MSCI World. Singapore, Hong Kong and Chinese equities outperformed while Indonesia, Malaysia and Thailand lagged.

What does Trump's First Week say about the Unorthodox Future Ahead?

Our head of Global Strategy in New York analyzes and forecasts the developments of major topics arising from the new Administration.

Turkey on a Knife's Edge

Our London-based expert on Turkey updates his views on the precarious situation there.

Asian Equity Monthly Outlook - January 2017

Asia ex-Japan (AxJ) equities returned -2.0% in US Dollar (USD) terms, underperforming MSCI World and MSCI Emerging Markets (EM). Currencies across AxJ generally weakened against the dollar following the Federal Reserve's (Fed’s) decision to hike rates.

House View: Bullish on Global Equities and the USD in 2017

Nikko AM's Global Investment Committee's 2017 Outlook — More Economic and Equity Reflation, Despite Less Dovish Central Banks

Equities Market Outlook 2017

Previously, capital markets had become highly conditioned to a “lower for longer” world, with the search for yield having implications both within and across risk asset classes.

Japan Equity Market Outlook 2017

We believe that in an increasingly uncertain world, Japan’s less uncertain market will provide a compelling opportunity for serious investors.

Asia ex-Japan Equity Market Outlook 2017

The phrase “lower for longer” could well become unfashionable very quickly after years of central banks combating the forces of deflation and wishing for inflation instead.

Global Equity Market Outlook 2017

The cumulative positioning of investors in companies and asset classes that are deemed safe in a “lower for longer” environment is undergoing a significant test at present.

Asian Equity Monthly Outlook - December 2016

Asia ex-Japan equities returned -2.9% in US Dollar (USD) terms, underperforming MSCI World.