Top Japan brokerage CEOs see more gains after shares hit record
Nomura’s Okuda says the bullishness stems from the nation’s corporate performance, demand from overseas investors and others
[YOKOHAMA] As Japan’s stocks hit a record high on the first day of trading this year, the chief executive officers of its biggest brokerages are predicting that the best is yet to come.
The broad Tokyo Stock Price Index jumped more than 2 per cent to an all-time high, while the blue-chip Nikkei gauge surged about 3 per cent on Monday (Jan 5).
Tokyo investors returned after holidays and caught up with the US tech rally, while a further weakening in the yen supported exporters. Stock investors shrugged off the possibility of more geopolitical tensions, after the US captured Venezuela’s President Nicolas Maduro.
The Nikkei may advance to 62,000 by the end of the year, predicted Akihiko Ogino, CEO of Daiwa Securities Group, Japan’s second-biggest securities firm.
That would represent an 18 per cent gain from the record high marked in October.
His counterpart Kentaro Okuda at Nomura Holdings, the largest brokerage, sees the Nikkei rising to 59,000 this year, while number three firm Sumitomo Mitsui Banking Corporation (SMBC) Nikko Securities sees 58,000 as the peak, said CEO Shuji Yoshioka.
Daiwa’s 62,000 forecast “reflects improved corporate performance”, with Japanese corporate pretax profit expected to rise about 13 per cent in the fiscal year starting Apr 1, said Ogino at a New Year’s event.
The Nikkei resumed climbing at the end of last year after a few weeks of sluggishness, outperforming most major indices of the US and Europe in the past year.
Nomura’s Okuda said the bullishness stems from Japan’s strong corporate performance, low geopolitical risk, and robust demand from overseas investors due to improvements in corporate governance.
Risks remain though for shares in Asia’s second-biggest economy, including diplomatic and military uncertainties, the US economy’s outlook and possible further rises in interest rates back home.
Nomura says the Nikkei may fall to as low as 48,000, a level the benchmark last touched in October.
SMBC Nikko’s Yoshioka is optimistic though, expecting growth not only in artificial intelligence-related stocks but also in the fields of machinery, information and communications, and pharmaceuticals. BLOOMBERG
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