BIGCAPITAL's Blog

March 29, 2011

Japanese reconstruction may boost GDP growth

Japanese reconstruction may boost GDP growth

Experts suggest the massive Japanese earthquake may push up the country’s gross domestic product (GDP) as a result of the reconstruction efforts but Japanese equities and insurers are likely to suffer.

A report from Citi expects reconstruction demand will materialise in the second half (H2) of 2011, eventually pushing up GDP.

“We estimate the net impact on GDP growth in 2011 at +0.2% to 0.3% points,” said Citi.

This supposition was supported by rating’s agency Moody’s.

“Reconstruction spending will likely prove to be a very effective and justifiable fiscal stimulus. Such expenditure will likely offset the economic impact from immediate losses in production and demand,” it said.

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That is why Warren Buffett said Japan represents a buy opporunity: Pace of reconstruction in stunning

That is why Warren Buffett said Japan represents a buy opporunity: Pace of reconstruction in stunning

Tsunami came and left giant gaps on Japan well constructued roads. That was the story of the Tsunami and the earthquake of March 11.

But then came the power of the Japanese people as they reconstructed what the quake had taken away. The astonishing speed of reconstruction is being used to highlight the nation’s ability to get back on its feet. Work began on March 17 and six days later the cratered section of the Great Kanto Highway in Naka was as good as new. It was ready to re-open to traffic last night.

Warren Buffett: Japan Disaster Presents A ‘Buying Opportunity’

Filed under: Uncategorized — bigcapital @ 3:12 am
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Warren Buffett: Japan Disaster Presents A ‘Buying Opportunity’

in South Korea (MarketCall.net) – Billionaire investor Warren Buffett believes Japan’s devastating earthquake is the kind of extraordinary event that creates a buying opportunity for shares in Japanese companies.

Japan, the world’s third-largest economy, has been battling to bring an overheating nuclear plant under control after it was battered by the March 11 earthquake and tsunami that rattled global markets and prompted massive intervention in currency markets by the Group of Seven industrial nations.

‘It will take some time to rebuild, but it will not change the economic future of Japan,’ Buffett said on Monday on a visit to a South Korean factory run by a company owned by one of his funds. ‘If I owned Japanese stocks, I would certainly not be selling them.

‘Frequently, something out of the blue like this, an extraordinary event, really creates a buying opportunity. I have seen that happen in the United States, I have seen that happen around the world. I don’t think Japan will be an exception,’ said the 80-year-old investor, dubbed the ‘Sage of Omaha’ for his successful long-term investment strategy.

Buffett heads Berkshire Hathaway Inc, which has substantial insurance and utility investments globally.

Japan’s Nikkei share average rose 2.7 percent on Friday, buoyed by the G7 support, but still ended the week down around 10 percent, with some $350 billion wiped off share values — the market’s biggest weekly slide since the global financial crisis in 2008. Japanese markets were closed on Monday.

Buffett said Berkshire Hathaway, which at the year-end was sitting on $38 billion of cash equivalent and last week bought U.S. specialty chemicals maker Lubrizol for $9 billion, was looking for more large-scale acquisitions anywhere in the world.

In his annual letter to Berkshire Hathaway shareholders last month, Buffett had said he was looking for more acquisitions.

‘The United States is most likely where we will do something,’ he said at a ground-breaking ceremony for a South Korean factory run by a unit of an Israeli firm owned by his investment vehicle.

Buffett will have yet more money to invest after Goldman Sachs buys back $5 billion of its preferred stock from Berkshire Hathaway, which the fund bought at the height of the global financial crisis.

EYE ON KOREA

Buffett, ranked the world’s third-richest man by Forbes this year, said he was also looking to buy entire businesses and large-cap shares in South Korea — where Berkshire is already a leading shareholder in steelmaker POSCO.

He said geopolitical risks associated with North Korea had not curbed his interest in South Korea, Asia’s fourth-largest economy. Berkshire also owns a stake in Chinese car and battery maker BYD.

Buffett did not disclose any holdings in Japan on Monday, and Berkshire Hathaway’s annual report did not show any major investments there. He had been due to visit Japan later this week, but canceled due to the earthquake.

Unlike many foreign fund managers, Buffett, who arrived in the southeastern city of Daegu on Sunday by private jet, won plaudits from ordinary South Koreans.

Sporting gray sweat pants and running shoes, Buffett was greeted by signs reading ‘Mr Buffett: Daegu Loves You.’

Many in this country of nearly 50 million people have bad memories of the 1998 Asian financial crisis when a deal with the International Monetary Fund bailed out the country but at the cost of tens of thousands of jobs.

Some U.S. hedge funds have been branded ‘vultures’ for buying South Korean assets on the cheap in the wake of that crisis.

‘It’s a once in a life-time opportunity. I’m honored to meet such a respected businessman,’ said Seo Hyun-joo, a housewife wearing Korean traditional dress.

Buffett later meets South Korean President Lee Myung-bak in Seoul and heads to India on Tuesday to launch his firm’s insurance selling portal.

Source: http://marketcall.net/

December 20, 2010

China Business News: Shanghai’s foreign trade hits record US$34.51 bln in Nov

Filed under: Uncategorized — bigcapital @ 10:03 am
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China Business News: Shanghai’s foreign trade hits record US$34.51 bln in Nov

Dec. 20, 2010 (China Knowledge) – Shanghai’s import and export value grew 31.5% year on year to a record US$34.51billion in November this year, according to the latest statistics released by the Shanghai Statistics Bureau.

The city’s exports were US$17.11 billion last month, up 27.2% year on year, while its imports rose 36.1% from a year earlier to US$17.4 billion.

The export value of mechanical and electronic products increased 23.4% year on year to US$12.56 billion in November, while the import value of such products was US$9.93 billion, up 31% from the same month of last year.

The city’s exports and imports of high-tech products were US$8.17 billion and US$6 billion in the month, up 19.6% and 23.4% year on year, respectively.

Last month, Shanghai’s exports to its top three trade partners, the E.U., the U.S. and Japan, were US$3.85 billion, US$4 billion and US$1.95 billion, up 14.8%, 30.6% and 39% year on year, respectively, while imports from the three partners were US$3.29 billion, US$1.87 billion and US$2.86 billion, growing 30.1%, 22.4% and 37.1% year on year, respectively.

Source: http://marketpin.blogspot.com/

October 21, 2010

Japanese Stocks Poised for Bounce to 11,000

Filed under: Uncategorized — bigcapital @ 12:21 pm
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Japanese Stocks Poised for Bounce to 11,000
Japanese Nikkei 225 Stock Average, which has lost 9.6 percent this year, may rise 20 percent through February next year, according to a technical analysis by Mitsubishi UFJ Morgan Stanley Securities Co.

The gauge may climb toward 11,408, the intraday high for the year achieved on April 5, said Naohiko Miyata, chief technical strategist at the brokerage unit of Mitsubishi UFJ Financial Group Inc., Japanese biggest bank by market value. Miyata says the gauge may be set for a sustained period of advance as the yen enters its final phase of gains against the dollar and after the measure found support at a key Fibonacci level.

Day-by-day we are seeing more signs that the gauge has bottomed out. Miyata said in a telephone interview. It;s very possible that the Nikkei will start testing its April high in a pattern similar to the one we saw last year.

Miyata also believes the yen may start weakening next month, helping to boost the Nikkei.

The dollar-yen rate has been moving in an 11-month cycle, touching its low when it enters a new phase, he said. The Japanese currency rose to its highest level for 2009 when it traded at 84.83 on Nov. 27. Taking that as a starting point, the end of the 11-month cycle will be this month.

The yen should start to weaken significantly from next month, with the Nov. 3 Federal Open Market Committee meeting as a turning point, Miyata said.

As the saying goes: buy on expectation and sell on fact. If the U.S. does carry out quantitative easing as people expected, there will be selling of the yen, Miyata said.

The Fibonacci sequence was identified by Italian mathematician Leonardo Fibonacci in the 13th century. The ratio between the numbers, about 0.618, is known as the golden mean, and is used by technical analysts to find levels of resistance and support.

According to Paul Chesson, manager of Invesco Perpetual’s Japan fund, which tops the best 10-year performance tables, it’s all about timing.

In 2002, he said after the Nikkei bounced that it was “a false dawn”. And again in 2006, he said that valuations were “too high” to be a bull. He was right both times.

“People usually sell Japan at the low points, and are all over it like a cheap suit when it has gone up for a couple of years. Last time everyone recommended it was 2006 when the market was 100pc higher than it is today.

“If you buy on a high you’ll be disappointed,” said Mr Chesson, who says valuations are a key factor today. “The market was too expensive 10 years ago, but now it’s too cheap. A fund manager only invests in 30 companies, not the whole market, so he can still perform well even if the market does not.”

Mr Chesson’s change of heart is the main reason why some investors are optimistic.

Deflation has long been a factor in Japan, but Mr Rose said this should not concern the investor too much.

“It has been tackled several times over the past 10 years, but I invest in companies, not politicians, and these will succeed.”

Although Japan may be geographically linked to the big emerging markets of China and Russia, economically it could not be more different.

Japan is a developed market and so does not have the same room for exponential growth that its neighbours have experienced in the past decade – and are expected to continue to have.

He invests in companies that are undervalued. He stresses that he picks companies, rather than invests in sectors or the stock market as a whole.
 

 

Japan Sets Interest Rates at 0 pct

Japan’s central bank has launched a 5 trillion yen ($60 billion) effort to buy a wide range of debt, including government bonds, corporate IOUs, real-estate investment trust funds and exchange-traded funds, setting off global concerns that central banks around the world are prepared for more quantitative easing.

The moves by the Japanese and U.S. central banks indicate that global monetary policy is approaching the end of the road, having exhausted nearly every tool of monetary policy available to stimulate economies that remain resistant to job growth.

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September 15, 2010

Naoshima: Expect BOJ to Take Further Monetary Steps To Fight Deflation

Filed under: Uncategorized — bigcapital @ 5:26 pm
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Naoshima: Expect BOJ to Take Further Monetary Steps To Fight Deflation

Japan’s Economy, Trade and Industry Minister Masayuki Naoshima said Wednesday that he expects the Bank of Japan to take further monetary steps to fight deflation shortly after the government and the central bank intervened in the currency market for the first time in more than six years, Kyodo News reported.

“In terms of stepping up cooperation between the government and the BOJ, and especially to show our strong resolve to end deflation, I expect more monetary policies from the BOJ,” Naoshima told reporters in Tokyo.

He also stressed that the market intervention was in line with the government’s policy, approved by the Cabinet on Friday, to “take decisive actions, including intervention, when necessary” to stem theY’s rise against major currencies.

“I think there was a strong impact on the market in the sense that the Japanese government made its will clear,” he added.

The policy was stipulated in the new stimulus package the government compiled to tackle the recent upsurge of theY and downside risks to Japan’s economic growth.

Asked about what the government would like the U.S. dollar-yen exchange rate to be, Naoshima said while it is difficult to tell, the assumed rate level among Japanese companies is 90Y to the dollar and the point is how “one thinks about the gap.”

http://www.Intermoney.org – Market Talk

Wednesday. September 15, 2010

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