Japan's stock market needs to get more support from Japan-based investors before it will make its next move higher, said Elizabeth X.Q. Tran, chief investment director-Asia, IDS Fund Management Ltd., Hong Kong.
While non-Japanese investors have accepted the idea that the country's accommodative stance on the money supply is a positive for the stock market, Japan-based investors "remain unconvinced," Ms. Tran said.
Hong Kong's market has benefited from large money flows from foreign investors, particularly from the United States, she said. But stock prices do not reflect some of the negatives of investing there, one being Hong Kong's planned reversion to Chinese rule in 1997, she said. Also, retail spending is subdued, she said, in part because of the negative effects of the property value crash.
As of the end of January, broad mandate portfolios run by Ms. Tran's group roughly had a 65% allocation to Japan, 12% Hong Kong and China, 8% Singapore, 4% Malaysia, 2% to 3% in each of Thailand, Philippines, Australia, and Indonesia, and the balance in other countries with less than 1%.
