Japan is starting to deliver some volume expansion. Port volumes turned positive for the first time in two years. Rail and airport volumes are robust and will receive a boost from the 2019 Rugby World Cup and 2020 Olympics.

Japan is open to improving corporate governance. Since my last trip to Japan, there was noticeable change in engagement with investors, including discussions on diversity – particularly women in the boardroom – and incentives linked to financial performance.

Japan is starting to deliver some volume expansion. Port volumes turned positive for the first time in two years. Rail and airport volumes are robust and will receive a boost from the 2019 Rugby World Cup and 2020 Olympics. Sentiment is lifting and domestic companies are expanding their operations. Identifying mispricing across the globe is one of the advantages of sector coverage within our team. 

Japanese gas utilities remain unloved with low expectations reflecting impending market deregulation – risks are to the upside. In contrast, the Chinese gas utilities are still a consensus buy and the risk of regulatory intervention is being downplayed.

In April 2013 I wrote a travel diary entitled “Japan: can user-friendly become shareholder-friendly?” Last week I got to revisit this idea and see what had changed.

 

Important Information

This material has been prepared and issued by First Sentier Investors (Australia) IM Ltd (ABN 89 114 194 311, AFSL 289017) (Author). The Author forms part of First Sentier Investors, a global asset management business. First Sentier Investors is ultimately owned by Mitsubishi UFJ Financial Group, Inc (MUFG), a global financial group. A copy of the Financial Services Guide for the Author is available from First Sentier Investors on its website.

This material contains general information only. It is not intended to provide you with financial product advice and does not take into account your objectives, financial situation or needs. Before making an investment decision you should consider, with a financial advisor, whether this information is appropriate in light of your investment needs, objectives and financial situation. Any opinions expressed in this material are the opinions of the Author only and are subject to change without notice. Such opinions are not a recommendation to hold, purchase or sell a particular financial product and may not include all of the information needed to make an investment decision in relation to such a financial product.

To the extent permitted by law, no liability is accepted by MUFG, the Author nor their affiliates for any loss or damage as a result of any reliance on this material. This material contains, or is based upon, information that the Author believes to be accurate and reliable, however neither the Author, MUFG, nor their respective affiliates offer any warranty that it contains no factual errors. No part of this material may be reproduced or transmitted in any form or by any means without the prior written consent of the Author.