U.S. Fund Managers Drawn by Rally to Japan Stock MeetingsAnna Kitanaka and Toshiro Hasegawa
U.S. fund managers and their European and Asian counterparts are increasing attendance at Japanese equity-investor conferences as foreign buying propels the country’s strongest stock rally in 40 years, according to CLSA Asia-Pacific Markets and Mizuho Securities Co.
About 20 percent more investors than last year will attend the CLSA conference from Feb. 25-28, with the greatest increase from senior U.S. portfolio managers and 700 in total expected, said Gary Hopkinson, Tokyo-based country head of the brokerage. Foreign investors were net buyers of Japanese stocks for 13 straight weeks through Feb. 8, according to data from the Japan Exchange Group Inc., boosting the Topix Index to its longest weekly winning streak since 1973.
Even as foreign buying propels the Topix, Japan’s broadest equity measure, to levels not seen since before the country’s record earthquake in March 2011, overseas investors’ returns are being eroded by a 7 percent drop by the yen against the dollar this year. The Topix’s year-to-date increase in dollar terms is 5.3 percent, less than the 7.3 percent gain by the U.S. Standard & Poor’s 500 Index.
“The interest is for foreign investors to try and understand if Japan is to finally get out of deflation,” said CLSA’s Hopkinson. Foreign investors are also “looking to reevaluate Japanese corporations’ competitive edge due to the weakening of the currency and to learn more about the current government which they see as strong leaders on the global stage.”
Fund managers from the U.S., Europe and Asia have helped push attendance at Mizuho’s two-day meeting from Feb. 26 to a record, said Mikihiko Kitano, spokesman for the Japanese securities firm. About 120 overseas investment firms will be represented, up from 76 companies last year and boosting attendance to 800. Daiwa Securities Group Inc. is also expecting a record number of foreign investors at its equity conference from March 4-8 in Tokyo.
Stocks have rallied amid optimism Prime Minister Shinzo Abe and the Bank of Japan will lead the country out of deflation. The yen has weakened at least 14 percent against the dollar since elections were announced in November.