If Japanese companies fully embrace higher shareholder returns, strong upside to the Japanese market can be expected, explains Ben Williams, investment director at GAM.
After the strong returns seen in 2013, Japanese equities have been rather subdued in 2014. Concerns over the impact of April’s consumption tax hike, plus profit taking from foreign investors saw the market struggle in the first quarter. However, with robust earnings momentum, and a nascent improvement in shareholder returns, the market rallied from May onwards. An analysis of global market moves and changes in earnings estimates over the last year has highlighted the case for Japanese equities. Over the past 12 months, the MSCI World index has rallied by 17.6%, whilst forward earnings es...
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