‘One of the greatest ways to invest in Asia’: Fund manager names 6 under-the-radar stocks to buy
Portfolio manager Richard Kaye is bullish on the Japanese market and believes it offers an opportunity “a lot of people don’t recognize.” “Japan is one of the greatest ways to invest in Asia because we have so many companies in Japan which have major suppliers to China [in areas like] automation, semiconductors, consumer aspirational brands,” Kaye, a portfolio manager at asset management firm Comgest, told CNBC’s ” Squawk Box Asia ” on Thursday. “Many of those companies are vastly more liquid. Frankly, they got greater visibility of governance, maybe, than their Asian counterparts.” The stronger performance of Japanese equities follows the Tokyo Exchange Group’s push for reforms last year. Japan’s benchmark index Nikkei 225 closed at a fresh record high of 40,913.65 on Thursday. The gain surpassed its previous high in March. The Nikkei index is now up nearly 22.4% year to date. For comparison, the U.S.’ S & P 500 is around 16.1% higher. Stocks to play Kaye believes several sectors and stocks in Japan make good plays right now. Among the companies on his radar are Fanuc Corp and Keyence Corp which are in the business of automation products. In medical electronics and health care, Kaye is bullish on Shimadzu Corp and Sysmex Corp . Other companies he likes include Fast Retailing — which owns fashion label Uniqlo — as well as tourism company Oriental Land , which owns the Tokyo Disney Resort. All six stocks are listed on the Tokyo Stock Exchange and trade as American Depositary Receipts in the U.S. Kaye sees those stocks as “direct and indirect plays on the recovery and growth of Asia and China.” That’s largely thanks to Japan’s forging of close trade relations with both the U.S. and China by way of joint ventures with local companies or “becoming indispensable suppliers of certain components,” he said. “Whether you’re a Chinese company or a U.S. company, you have to depend on these Japanese suppliers … And I think [Japan has] been able to play the two big giants, U.S. and China, in a very smart way, which has given a great opportunity to these companies,” Kaye added.
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