Tags: Ross | Japan | Stocks | great

Wilbur Ross: Japanese Stocks Are a Great Buy Right Now

Tuesday, 01 Nov 2011 09:06 AM

Now is the time to invest in Japanese companies because not only are they cheap, they also serve as a great conduit for investing in emerging markets, says investor Wilbur Ross.

First of all, share prices for Japanese companies are low.

"I think it's finally gotten to the point where it's so cheap that basically the whole Topix [Tokyo Stock Exchange Price Index] is trading around book value. That means there's no going concern value, no goodwill attached to Japan Incorporated, the third largest economy in the world," Ross tells CNBC.
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Second, there's the emerging-market play.

About 56 percent of Japanese exports go to China while another 16 percent go to other emerging markets, many of which are not stuck in economic doldrums like the industrialized U.S. and European economies, Ross says.

wilburrossgetty200.jpg
Wilbur Ross
(Getty Images photo)
"So here you have no values, no premiums being recorded to a group of companies that are a very good participation in emerging markets and they are generating a lot of cash flow."

The Japanese yen, meanwhile, has been on a strengthening trend, although Ross says even though a stronger currency makes exports less competitive, it does bring advantages in Japan's case.

"Japan has to import all of its raw materials: iron ore, coal, oil, natural gas and all of that. So while the strong yen is a problem in terms of exports, which are around 11 percent of the economy, it's a big help in terms of imports," he said.

"It's also a big help in another regard in that I believe you will see Japanese companies now using their excess cash and the high yen to make acquisitions outside, particularly in the emerging markets."

The Japanese government, meanwhile, has intervened in the currency market to weaken the yen on concerns that its strength is preventing economic growth.

"Although I had repeatedly said we will take decisive measures against speculative moves in markets, those moves unfortunately continued so I ordered intervention," says Japanese Finance Minister Jun Azumi, according to the AFP newswire.

"It was solo intervention this time."

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Now is the time to invest in Japanese companies because not only are they cheap, they also serve as a great conduit for investing in emerging markets, says investor Wilbur Ross. First of all, share prices for Japanese companies are low. I think it's finally gotten to the...
Ross,Japan,Stocks,great
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2011-06-01
Tuesday, 01 Nov 2011 09:06 AM
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