You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Twice daily
MoneyWeek
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Four times a week
Look After My Bills
Sign up to our free money-saving newsletter, filled with the latest news and expert advice to help you find the best tips and deals for managing your bills. Start saving today!
Amid ongoing market volatility caused by Covid-19, looking beyond the immediate economic and political uncertainties can be challenging. Nevertheless, the fundamental long-term outlook for Japanese smaller companies remains positive and we see no shortage of exciting investment opportunities.
Quality companies boasting strong balance sheets and a positive long-term growth outlook have proven to be resilient through periods of heightened volatility, leaving them well positioned to thrive in the current market environment.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Cashing in on digitised business cards
While Japan is an advanced industrial economy, certain areas such as financial services and payments lag other markets in terms of technological sophistication. Japanese manufacturing, however, is world- class and the country is a leading supplier of factory automation equipment and electronics parts. So companies that specialise in niche technology products driving global innovation look appealing.
One such firm is Sansan (Tokyo: 4443), a software company that provides a cloud-based, multi-platform contact management tool for corporate customers in Japan. Its product offering is centred around digitised business cards, which can be simply scanned to build a database designed to enhance staff productivity in sales, marketing and client service activities. The business occupies 83% of market share in Japanese business card management market. With the ongoing pandemic more people will want to shift to contactless ways of exchanging information, so we remain upbeat on the long-term growth prospects of the company.
A winner in video gaming software
Revenues in the video gaming sector are projected to reach US$12.2bn in Japan this year. Enter Capcom (Tokyo: 9697), which develops and publishes video game software, including bestsellers such as Street Fighter, Monster Hunter, and Resident Evil (Biohazard).
Over the years, the game software business has become more robust, especially for those providers with strong intellectual property protection. This is because of the rising penetration of digital downloads, which has increased from 6% of sales in 2012 to around 77% now.
Bringing green boilers to China
Despite the shaky economic backdrop, we continue to see attractive opportunities in industrials. Miura (Tokyo: 6005) is Japan’s leading boiler manufacturer, with environmentally friendly credentials and global expansion plans.
The need to reduce carbon dioxide emissions is a big topic across the global economy and Miura’s ‘on-demand steam solution’ boilers are more environmentally friendly than traditional coal-fired boilers. We believe the company is well positioned to achieve long-term growth by selling its boiler technologies across China (where the boiler market is six times larger than Japan’s and dominated by coal-fired products) and other emerging countries.
-
Should you buy an active ETF?ETFs are often mischaracterised as passive products, but they can be a convenient way to add active management to your portfolio
-
Power up your pension before 5 April – easy ways to save before the tax year endWith the end of the tax year looming, pension savers currently have a window to review and maximise what’s going into their retirement funds – we look at how
-
Three key winners from the AI boom and beyondJames Harries of the Trojan Global Income Fund picks three promising stocks that transcend the hype of the AI boom
-
RTX Corporation is a strong player in a growth marketRTX Corporation’s order backlog means investors can look forward to years of rising profits
-
Profit from MSCI – the backbone of financeAs an index provider, MSCI is a key part of the global financial system. Its shares look cheap
-
'AI is the real deal – it will change our world in more ways than we can imagine'Interview Rob Arnott of Research Affiliates talks to Andrew Van Sickle about the AI bubble, the impact of tariffs on inflation and the outlook for gold and China
-
Should investors join the rush for venture-capital trusts?Opinion Investors hoping to buy into venture-capital trusts before the end of the tax year may need to move quickly, says David Prosser
-
Food and drinks giants seek an image makeover – here's what they're doingThe global food and drink industry is having to change pace to retain its famous appeal for defensive investors. Who will be the winners?
-
Barings Emerging Europe trust bounces back from Russia woesBarings Emerging Europe trust has added the Middle East and Africa to its mandate, delivering a strong recovery, says Max King
-
How a dovish Federal Reserve could affect youTrump’s pick for the US Federal Reserve is not so much of a yes-man as his rival, but interest rates will still come down quickly, says Cris Sholto Heaton
