Investors snapping up Japan-linked stocks

Investors snapping up Japan-linked stocks

Investors have been buying up Japanese-linked stocks on a wave of optimism that the Bank of Japan (BOJ) will succeed in kick-starting the nation's economy.

On April 4, the BOJ announced an aggressive move to boost the money supply in a bid to lift Japan out of more than a decade of economic stagnation.

Analysts said that in the past week or so, property-related stocks with businesses in Japan have benefited most from the measures.

One of them is high-end warehouse developer Global Logistic Properties. Its share price has risen 8.9 per cent since April 4 to close at $2.81 last Friday.

Another beneficiary is Saizen Reit, a Singapore-based real estate investment trust (Reit) with investments in residential properties across 14 cities in Japan.

Its share price has climbed 6.2 per cent since the BOJ announcement to close at 20.5 cents last Friday.

OCBC Investment Research's Carey Wong also recommended two other Reits with Japan links: Parkway Life and Starhill Global.

With 33 nursing homes and hospitals in Japan, Parkway Life Reit has 20 per cent of its portfolio in the country, said Mr Wong.

Its share price has risen by 11 cents to $2.63 in the same period.

Starhill Global Reit is a retail mall trust and has investments in six malls in Japan. The BOJ measures have pushed its share price up four cents to close at 93.5 cents last Friday.

Despite investor enthusiasm, Mr Wong noted that there will be no real immediate impact on Reits as any cash flow will take time to trickle down to the rental market.

Sias Research chief executive Roger Tan said another potential beneficiary is Uni-Asia Finance Corporation.

It "has exposure in properties and hotels in Japan. It also repackages and sells the property in its portfolio", said Mr Tan.

Its business model of directly buying and selling property will allow Uni-Asia Finance to benefit sooner from BOJ's new policies than the Reits, added Mr Tan.

Its share price has risen 2.4 per cent to 21.5 cents during the same period.

General manager of Fundsupermart.com Wong Sui Jau said: "The Japan fund managers I have come across recently are quite optimistic (about BOJ's moves).

"In fact, some of the benefits were already seen in the performance of Japan funds in the first quarter.

"The Nikkei 225 index surged 10.5 per cent as weakness in the yen allowed the Nikkei to climb to 12,493, its highest level since September 2008," he added.

Fundsupermart is an online trading platform that carries nine Japanese unit trusts.

Despite this, Mr Tan said analysts are still taking a "wait- and-see" approach.

"Japan's target inflation is not new and indicates how desperate the country is to revive its growth rate and economy," said Mr Tan.

He added: "It'll probably take a lead time of between six months and a year for the real effects of the (monetary easing) policies to be seen."

rjscully@sph.com.sg


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