Gavekal Capital: Digging Deeper Into Japanese Outperformance

Tuesday, February 25, 2014

Digging Deeper Into Japanese Outperformance

We've noted on several occasions over the last week the recent outperformance of Japanese shares, so we thought it fitting to dig even deeper into the topic. In the below two tables we show the 1-week sector performance (equal weighted) and the top performing companies in Japan over the period. Some observations are as follows:

  • Cyclical groups that carry a lot of leverage, and especially financials, have lagged badly
  • Cyclical groups that employ less leverage (tech) have performed well
  • Bond substitutes (telecom and utilities) have done well while growth counter cyclicals (health care, staples) have also beaten the average

Japanese 1 Week Performance by Sector:

Top Performing Japanese Companies Over the Last Week: