Daily Brief Japan: Oriental Land, Tokyo Stock Exchange Tokyo Price Index Topix, Kubota Corp and more

In today’s briefing:

Nikkei 225 Sep22 Annual Review; Data Final, Predictions Unch’d; Strategy Involved
Isn’t Performance of Japanese Stocks, After All, the Reason for Declining % Individual Shareholders?
Kubota (6326) | Small Tractors…big Problem

Nikkei 225 Sep22 Annual Review; Data Final, Predictions Unch’d; Strategy Involved

The data is largely unchanged since the Nikkei 225 Sep Annual Review Predictions – 3 In, 3 Out set of predictions published 15 days ago.
The consultation results are out. They are as expected too. This has the hallmarks of a VERY well-signalled trade. But it’s a biggie. The funding trade alone is ¥600bn.
Because of the data, market conditions, and the variability of choice at the edges, I believe that warrants particular strategy.

The Nikkei suggests that the aging population may be the cause. However, performance is assumed to be factor, even when young people open accounts, they investment mostly in foreign stocks.
In the end, what matters most is that the listed company presents growth expectations. This is what leads to stock performance.
While tax and other support are one of the factors that motivate individuals to invest, if companies aren’t attractive for investment, their investments are likely to be in foreign stocks.

Kubota was a key beneficiary of stay-at-home demand in the US over the past two years
The pull-forward in demand is now normalising, while the macro environment has also turned more difficult
We think Kubota will miss full year analyst numbers and expect the stock to trade lower to 1.2x book

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