The Goldman Sachs Strategists wrote in their latest client note, investors are “overly pessimistic” on Japan equities, as cited by Bloomberg.
Key Quotes:
“Based on polls conducted at our January macro conferences across Europe and Asia, most respondents have very low expectations about the outlook for Japanese stocks in 2020.
The economic impact from the coronavirus outbreak is likely to be limited, earnings revisions have turned positive and corporate governance is improving.
disappointing earnings should mainly be finished after last year, and that increasing payouts, shareholder proposals and tender offers are reassuring over governance.
Expect little negative impact from the virus as inbound consumption represents only about 0.8% of Japanese gross domestic product.
If a worst-case coronavirus scenario is averted and global growth re-accelerates later this year, Japanese equities should be well-positioned given the heavy exposure of its indices to global cyclical sectors such as industrials.”
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