JAPAN - Japanese equities will provide strong returns for pension schemes, leading fund managers claim.
JPMorgan Fleming Asset Management estimates earnings of blue chip stocks listed in the Tokyo exchange could be up 25% this year – well ahead of their UK and US peers.
Last year Japanese equities returned their first positive returns since 1999 with the economy benefiting from a cyclical upturn in domestic demand as well as strong interest from the US and rapid structural growth in China.
JPMorgan Fleming’s Japan portfolio group manager, Stephen Mitchell, said: “Macro data continues to improve, while corporate restructuring is delivering enhanced profits and positive cashflows.
As China develops it is turning to Japanese companies for the supply of everything from new factory equipment to consumer products like cars and cosmetics – there is certainly a strong case for investing in Japanese equities.”
Britannic Asset Management head of Japanese equities Natasha Chetwynd was also bullish on the sustainability of the current economic recovery.
She points to asset price inflation as a positive indicator, with property prices – which have been falling since the late 80s – starting to rise. She also says there is increased demand for Tokyo condominiums and office space.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers