[TOKYO (Reuters)]- Daiwa Securities Group Inc. Chairman Seiji Nakata said in an interview with Reuters that investors are shifting their focus from “growth” to “value” amid rising interest rates around the world. The Japanese market, which is positioned, has an advantage. The inflow of funds from foreign investors is indeed increasing, and President Nakata said the purchase of shares in Japanese trading companies by Warren Buffett, a major US investor, in November was a “turn of trend “.
Growth stocks with high growth expectations tend to be sold during rising interest rates. Chairman Nakata said, “As investors’ eyes are shifting from growth to value, the market with the most value is Japan. Japan has a relative advantage as an investment destination.”
According to the November trade trends by investment sector announced by the Tokyo Stock Exchange, overseas investors net bought 1.2873 trillion yen. It was the first time in two years since November 2020.
President Nakata cited the strong business performance of Japanese companies, Japan’s growth rate, the feeling of dollars being undervalued due to the depreciation of the yen, and the shift of funds from China to reasons why foreign investors should buy. Among the IMF’s (International Monetary Fund) growth rate forecast for 2023, Japan’s economic growth rate forecast is the highest among the seven major countries (G7).
Chairman Nakata stressed that Buffett-led Berkshire Hathaway raised its holdings ratio of major trading companies in November as “a change in the tide”, and there is a high possibility that foreign investors will buy Japanese stocks.
In Japan, there are many undervalued stocks with a price to book ratio (PBR) of less than 1. President Nakata said, “I am ashamed of that.” He said, “If the investment point of view changes, that kind of place will be bought.”
Furthermore, President Nakata said, “As a shareholder, we should highlight the issues that should be highlighted.” It is said to encourage companies to cross-sell their shares, review their corporate portfolios and increase the diversity of their boards.
*The interview was conducted on the 15th.
