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Japan, China, Asia stock markets start the week on a roll

posted on September 9, 2013 at 8:00 pm
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The week has certainly started out very well for Japan. And indeed for Asian financial markets.

First, Tokyo was announced as the site of the 2020 Olympic summer games. Shares of property developers went bonkers overnight on the news. Sumitomo Realty and Development (8830.JP), which has the biggest land bank in Tokyo with the potential for 30,000 new apartments, was up 4.7% overnight on the Tokyo market. Mitsui Fudosan (8801.JP in Tokyo) and Mitsubishi Estate (8802.JP in Tokyo and MITEY in New York), with land capacity to build 15,000 apartments, were up 6.4% and 4.7%, respectively, overnight in Tokyo.

Second, a big increase in capital spending pushed GDP growth in the June quarter up to a revised annual 3.8%. That was an increase from the first estimate of 2.6%. Of course, faster GDP growth is good news for Prime Minister Shinzo Abe’s effort to put Japan back on the path to sustainable growth, but the upward revision in capital spending is particularly significant since Japanese companies have been reluctant to increase capital spending even as consumer spending picked up. This data suggests that may have changed.

Add the news from Japan to news from China and Asian markets began the week with a big dose of optimism. Chinese exports increased by 7.2% in August from August 2012. That was above the 5.5% projection by analysts surveyed by Bloomberg. Consumer inflation rose by just 2.6%, giving the government no need to tighten.

 

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3 comments

  • nkaufman on 10 September 2013

    Hello Jim,

    MGM – still waiting for your revised target price on this.

    QCOM – would love to know how it gets to your target price of $82.

    SLB – Getting close to your target of $88. What do you think – hold or fold?

    Thanks as usual.

  • greedibanks on 10 September 2013

    Looks like we’re off to the races and well on the way to refuting yet another canard — namely, the belief that September must be a bad month for stocks. All 3 averages have surged above their 50-day MAs.
    What is your problem with Qcom, nkaufman? The stock price is doing pretty well these days, at close to 70 already.

  • nkaufman on 10 September 2013

    greedibanks,

    I do not have a problem with any stock let alone Qcom.

    Before the recent rise from about 66 to nearly 70, Qcom had been an underperformer for quite some time and I was wondering if the impending Apple/China Mobile deal could give it a spark. Jim had mentioned that Qcom faces challenges from cheaper Chinese rivals. Hence my query as to what Qcom needs to do to get to Jim’s target price of $82 if the target still holds true or should the target price be revised.

    Enjoy the surge in the market..

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