Nomura’s (NYSE: NMR) (TYO: 8604) monthly “Individual Investor Survey” was released late last week. This is worth an investor’s time to flip through for a read on the psychology of the Japanese investor. Nomura also lists participants’ most-watched stocks (keep reading for a screen cap) and includes questions that deal with current developments (this month’s concern the consumption tax hike impact and shareholder meetings). I discussed Nomura’s survey as a resource in my book, Investing in Japan. The survey is one of a few resources that will enhance English-language access to, and understanding of, the Japanese market.
In summary, this month’s Individual Investor Survey shows a much more bullish outlook than April. What’s interesting is that investors see the yen weakening versus the dollar but also cite the yen as having the most appeal among currencies. These are not as extreme or contradicting views as might seem once reading more of the context. I find the results of the spot question re. the impact of the consumption tax hike on the economy and stock market interesting and somewhat less bearish than I would have expected. Only 11.5% of respondents were distinctly bearish. Keep in mind these are completed in isolation rather than a raise-your-hand setting. The 39.4% wait-and-see seems quite honest. The latest GDP figure was an upside surprise and naturally everyone expects a dip, but the looming question is how much demand was brought forward by the consumption tax hike.
For this month’s first spot question, we asked investors their views on the impact of the consumption tax hike, implemented on 1 April, on the economy and the stock market. The most popular response, at 39.4%, was, “Some more time is needed to discern the impact of the consumption tax hike. For now I plan to refrain from purchasing or selling stock.” The next most popular response, at 32.7%, was, “The impact of the consumption tax hike on the economy now looks to be smaller than I had expected. I would like to purchase stock.” Conversely, only some 11.5% of respondents said, “The impact of the consumption tax hike on the economy now looks to be larger than I had expected. The impact on the stock market also looks negative, and I would like to sell some (or all) of my stockholdings.”
I’m not going to dwell on GDP or demand as it’s easy to get carried away. I’ve long recognized there’s sizable oversupply in some industries, making some companies fundamentally uninteresting investments for obvious reasons when analyzing financials. However, it will always be the case that people need to eat, drink, and function in daily life. That should be enough said for value-oriented readers.
Here’s the list of most-watched stocks. No surprises with Toyota (NYSE: TM) (TYO: 7203) and Softbank (OTC: SFTBY) (TYO: 9984), among some other usual suspects. At first/quick glance I’m not especially excited about any of these in particular, though that’s because I have an acknowledged bias for smaller caps and a further bias among them. I still enjoy seeing the list and sometimes find good leads.