Invest in Japan

Total Japan REIT valued at 10TY

2006-08-29T21:48:00.000+09:00

The Japan REIT (Real Estate Investment Trust) boom has ended and The Tokyo Stock Exchange REIT index is now down 7% from its top reached in May.
However the flow of funds in real estate is continuing. The balance of Japanese REIT at the end of June 2006 has jumped 73% in one year to 4.5 TY and the number of listed REIT has doubled to 36.For the REIF (Real Estate Investment Fund) which are unlisted the total balance has raised to 5.5 TY or an increase of 68%. Over 120 companies are managing REIF.
In total, investment in real estate funds has reached 10 Trillion Yen.
Da Vinci advisors Japan largest real estate fund operator now manages 790 BY a rise of 130% in one year.
For more: http://www.japanconsult.com/Japan_REIT_market.htm

Softbank to buy Vodafone Japan for 16B$

2006-03-21T22:03:00.000+09:00

Softbank is planning to buy Vodafone Japan for 2 Trillion Yen (about 16 B$). This announce a major shake up in the mobile phone services market in Japan. Currently the average price for one minute mobile phone conversation is about 0.5$ per minute one of the highest price in the world. one can expect Softbank to come up with serious discounts as it did in the broadband access market.
http://www.japanconsult.com/

Japanese Economy Improvement

2006-02-19T16:02:00.000+09:00

Japanese economy has improved for the last 12 months with 4 successive quarters of positive nominal growth. The latest GDP figures of Q4 2005 show a nominal growth of 0.9% and real of 1.4%. The bad news is that GDP deflator still stands at -1.6% year on year which shows the persistance of deflation. (see our GDP Growth Table)Despite all the optimistic declaration, we still think that this is improvement is not durable as the economy is still propped ud by a huge government deficit of 8% of GDP although the Government Bond interest rate is still only around 1.5% on 10 years bond.This situation is not sustainable in the middle term. Furthermore forecast tax increases and structural problems such as weak demographics , rigid regulation, high tax rates that discourage initiative still weighs on the long term prospect of the Japanese economy.
Eric Perraudin
JMC

Japan Postal Reform Key for Japan

2005-08-19T16:20:00.000+09:00

Japan postal reform is Key for Japan.Not for the mail delivery services (although it is one of the most expensive in the world and would need reform)The key is the financial assets.Japan Post bank is the biggest bank in the world with 2 Trillion US$ assets.Its insurance arm is bigger that the 4 major Japanese insurance companies put together.Currently these assets are used very inefficiently to financemany projects which are useless (except for politicians). For the foreign investors if these assets are freed, this will mean:
- More investment opportunities:
Unprofitable companies and bad loans will needto find investors.
- More opportunities to raise money.
For the Japanese economy it is very positive since it will make it closer to a real market economy and free it from the bureaucratic controls that prevent it to grow.
For more on Japan economy and investments, check my website:http:/www.japanconsult.com/

Goldman Sachs offer to buy Seibu Railways for 8.5 B$

2005-03-25T10:22:00.000+09:00

Goldman Sachs offers to buy Seibu Railways for 8.5 Billion $(900 BYen)
Goldman Sachs a major player in purchasing distressed assets, real estate and leisure activities is very interested in Seibu real estate and leisure facilities holdings. It is said that Seibu owns around 15,000 hectares of land and 170 leisure facilities including golf courses for which GS is a major player. This would be the biggest acquisition by a foreign group in Japan.
By Eric Perraudin http://www.japanconsult.com/

Land price continue to fall in Japan except for Central Tokyo

2005-03-24T11:02:00.000+09:00

According to Japanese government land prices fell for the 14th consecutive year in Japan: Residential land prices across Japan decreased an average of 4.6% in 2003, continuing the trend of a 5.7% in 2003. Commercial land prices fell 5.6% continuing the fall of 7.4% in 2002. the pace of decline was reduced this year with major towns in Japan Tokyo, Nagoya, Osaka showing a pace of decline of only 3.2% against 5.8% in 2003 for commercial areas. However, land in the 5 central wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku and Shibuya) have seen an increase of 0.8%

Eric Perraudin
http://www.japanconsult.com/

Japanese Law does not protect shareholder rights:

2005-03-17T15:48:00.000+09:00

Japanese Law does not protect shareholder rights:
Livedoor who now owns more than 50% of Nippon Broadcasting has to wait 3 months till June to replace the current board of directors. It is impossible to call for an extraordinary shareholder meeting to change the Board even if you own the majority of shares in a company.
This type of archaism in Japanese Law really reflects the fact that a long way has still to go before shareholder rights are recognized in Japan.

by Eric Perraudin
http://www.japanconsult.com/

Japan REIT number to double in 2005

2005-02-06T21:01:00.000+09:00

It is expected that the number of listed REIT in Japan will double to 30 in 2005.
The current yield on REIT is about 3.8% and we expect the REIT boon to continue
as long as there is a substantial gap between Japanese Government Bond returns,
currently 1.5% for 10 years, and REIT returns.
For the real estate market, that wil likely translate in a paradoxal situation with a continuous strong activity to build premium buildings for REIT, an increase in building value as well as decrease in rents provoked by the high supply of new buildings and also the contraction of demand resulting of Japanese poor demographics.

For more details see JMC site

Japan Economy: more and more dependent on China, slow growth ahead, inflation to get out of deficit

2005-02-06T17:47:00.000+09:00

Jesper Koll, chief economist of Merril Lynch, was giving his annual Japan economy forecast speech at the ACCJ on February Friday 4. Among his main messages were:

- Japan economy is more and more dependent on China. China is the most important export market for Japan

- Japan GDP growth will be slowed by both:

- tax increases that will represent about 2TY for the next 3 years

- poor demographics that will see the baby boom high paid generation retir, only partially replaced by less numerous, partially employed younger generation with much lower paychecks

- Japan government budget and debt (150% of GDP) is becoming preoccupant and Dr. Koll predicts inflation will probably the way out.

Eric Perraudin, Managing Partner JMC.

Hedge Funds Boom In Japan

2005-01-28T18:08:00.000+09:00

There is currently a boom in marketing hedge funds and alternative investments in Japan. In 2003, Japanese pension funds have invested 237 BY or 3B$ in hedge funds in 2003 representing 7% of their investments in 2003. According to Ministry of Finance latest statistics, it is 5.85 TY or about 60B$ that has invested into "Caribbean" from January to November 2004, representing a 150% increase over 2003.
Main reason for the hedge funds boom are:

- Recent liberalization of investment rules allows institutionals to invest in hedge funds. (For example, ).
- Private investors face a lack of investment opportunities.- Past performance of securities or real estate investments for the last ten years has been disastrous while hedge funds and alternative investments have shown a relatively steady track record. (For example, Toshiba employees pension fund is investing 25% of its 300BY assets to alternative investments).
- Creation of Japan focused hedge funds following the big success of opportunity funds and private equity funds such as Ripplewood and Carlyle
- Numerous opportunities for investment that have also triggered huge growth in the M&A market in Japan.
- Japanese are sitting on a massive pile of savings evaluated to 1400 TY or about 14 T$.
- a general Asia wide boom in hedge funds.

For more information go to JMC website

M&A record in Japan in 2004

2005-01-10T16:48:00.000+09:00

Number of M&A reached a record new high of 2,091 in 2004 according to Thomson Financial, 301 more than in 2003. By value, including planned deals such as UFJ buyout by BOTM, M&A increased 42% to 108 B$. Am0ng biggest deals: BOTM purchase of UFJ with a 30% premium, merger between Fujisawa Pharmaceutical and Yamanouchi Pharmaceutical, IRCJ acquisition of Kanebo cosmetics business.
For more information, visit JMC website

Ripplewood sells Japan Telecom for a 1B$ capital gain

2004-06-30T11:07:00.000+09:00

Ripplewood sold for 3B$ a company that it bought one year ago for 2B$ making a 1B$ capital gain in less than one year. Close to 50% return!This deal also makes a lot of sense for Softbank that will be able to offer point to point services to customers thanks to its existing local networks

Eric Perraudin
http://www.japanconsult.com/