Japan is one of my most familiar market, as I spend nearly one year just focusing on Japanese market. Japanese companies and their banks are famous for their conservatism and their large pile of cash.
The Japs have been soo risk-averse after the 1990 bubble burst that they love to be "debt-free", the exact opposite of their US counterparts. There is a dilemma in this, as Japanese companies has very little growth in the domestic market, but are reluctant to borrow and expand to other countries. This problem is especially obvious for the big Japanese banks, which has large retail deposits but no where to spend it. Explanation: Japs love to put their cash in banks, they do no trust the stock market anymore. They also know that the housing market is not guarantee to go up forever (when will Chinese learn that?) , they have experienced the biggest housing bubble before 2008 and also frequent earthquakes confirms their view that real estate is a liability (mortgage payment) while the actual house depreciate over time.
Now the Japanese banks are finally taking action, Mitsubishi UFJ and Nomura have start to purchase overseas business from the dying US financials . This is a good step and will allow them to grow while the domestic market slowly contract due to the aging and decreasing population.
This is the best time for the Japanese companies to put their cash into good use. Not just the banks. I really think Nintendo should do something with their over 1 trillion cash deposit in bank....
Only time will tell if the Jap market will become a market that worth investing again. I still think it is not, not yet.
2008年9月24日 星期三
2008年9月23日 星期二
Financial markets
Well... I have stopped writing about the financial market and economy for a long time, but I think its time to revisit it.
Much have happened in the last few months, especially last weeks. Huge financial entities have collapsed, bailout or merged. Things are getting worse... (as expected XD )
Now, you should have seen enough of those bad news, let's talk about something else! Sovereign wealth funds (SWF), one of the big topics last year, is now almost forgotten. However, I think that their importance now is higher than ever. They are probably one of the few big institutions that are still holding a lot of cash to purchase. They have a few aims: get better return from their countries reserve funds, gain "power" in international relationship with their money, secure resources and technology.
For example, you can expect Chinese Investment Corp to increase their investment in resources companies/ actual mines. The prices have come down a lot and they should have much higher bargaining power now, I do not think those "patriots" have much say now when their economies need cash so urgently. The incident of CNOOC failing to buy Unocal because of politics should be harder to repeat now.
Out of my guts feelings, I think SWF will also increase their spending in the real estate market. Targets including class A commercial properties in NY, London and other major cities. Residential properties may have some potentials too. However it is hard to detect as SWF are usually very secretive. This is a good chance for them to get a long term income generating asset with proven record (they are not venture capital after all).
SWF may well be the "investor of last resort" in the current market. Keep your eyes for their news!!
By the way, seems that a lot of people are thinking the same thing as me:
Vitasoy (維他奶) was up 15% on 22 Sep. (Many restaurants use vitasoy instead of milk now!)
Much have happened in the last few months, especially last weeks. Huge financial entities have collapsed, bailout or merged. Things are getting worse... (as expected XD )
Now, you should have seen enough of those bad news, let's talk about something else! Sovereign wealth funds (SWF), one of the big topics last year, is now almost forgotten. However, I think that their importance now is higher than ever. They are probably one of the few big institutions that are still holding a lot of cash to purchase. They have a few aims: get better return from their countries reserve funds, gain "power" in international relationship with their money, secure resources and technology.
For example, you can expect Chinese Investment Corp to increase their investment in resources companies/ actual mines. The prices have come down a lot and they should have much higher bargaining power now, I do not think those "patriots" have much say now when their economies need cash so urgently. The incident of CNOOC failing to buy Unocal because of politics should be harder to repeat now.
Out of my guts feelings, I think SWF will also increase their spending in the real estate market. Targets including class A commercial properties in NY, London and other major cities. Residential properties may have some potentials too. However it is hard to detect as SWF are usually very secretive. This is a good chance for them to get a long term income generating asset with proven record (they are not venture capital after all).
SWF may well be the "investor of last resort" in the current market. Keep your eyes for their news!!
By the way, seems that a lot of people are thinking the same thing as me:
Vitasoy (維他奶) was up 15% on 22 Sep. (Many restaurants use vitasoy instead of milk now!)
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