Investor Jim Rogers said he likes Japanese stocks, as they are “very cheap” and domestic investors incurring losses overseas are likely to repatriate funds into the local equity market.
“They will soon start losing money on the money invested abroad so a massive amount of that money is going to come back home,” Rogers, chairman of Rogers Holdings, said at a forum in Tokyo yesterday. “I doubt that will go into bank deposits or bonds because interest rates are so low. Then at least they can go to commodities or stocks.”
The Nikkei 225 Stock Average tumbled 20 percent this year as Europe’s debt crisis clouded the global economic outlook and the yen’s advance eroded exporters’ sales. Stocks in the gauge are valued at 15.1 times estimated earnings on average, compared with 11.7 times for the Standard & Poor’s 500 and 9.7 times for the STOXX Europe 600, according to data compiled by Bloomberg.
Rogers said he holds shares of Sanrio Co, the Hello Kitty brand licenser, and toymaker Tomy Co. Tokyo-based Sanrio has soared 110 percent this year, while Tomy, the Japanese maker of Transformer and Pokemon toys, has slid 27 percent.
The yen is likely to remain high, Rogers said, adding that the Japanese currency and the Swiss franc make up the biggest portion of his foreign-exchange portfolio. The two are the best performers against the US dollar this year out of 16 major currencies tracked by Bloomberg, with the yen climbing to a postwar high of 75.35 on Oct. 31.
Singapore-based Rogers said he is pessimistic about most of the global economy as it faces the prospect of inflation and currency-market turmoil in coming years. In Japan, problems associated with a declining population and a swelling public debt will become more acute in 10 to 20 years, he said.
Rogers added that he is “very, very bullish on Asia, especially China.”
He said he is waiting for a rout in the Chinese stock market before buying more shares there. India isn’t attractive because of the nation’s high debt, he said. Myanmar is the “most promising and exciting” Asian market as the government reforms the political system in a country with ample natural resources, he said.
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