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The week of 18 August – 24 August 2016
Volume 28 Number 01
Tokyo
Just how close a society
is Japan ? How insular is the
country, which is supposed to
be a land of the Rising Sun,
implying that it is a “bright,
open” nation ? Let us look
at some statistics for some
eye-opening experience and
get to the real truth about
modern Japan.
The figures from
table 1
below are from Oxfam and are
as at 31 Dec 2015.
The fact that Japan hosted
far fewer refugees and asylum
seekers than that of Germany
or the UK is not surprising.
It is already expected. How
about this ? Poor China hosted
29 times more refugees and
asylum seekers than wealthy
Japan. China’s per capita
income is substantially lower
than that of Japan, yet China
hosted a lot more refugees and
asylum seekers than Japan. Is
Japan unable or unwilling ?
The data from the table
above is shocking and
revealing but it does not stop
there. In 2010, Japan started
to accept refugees who fled
from Myanmar from camps in
Thailand. Since then, Japan
has taken 24 families. 24
families, no typing error.
Here is another shocking
fact about how insular and
closed-minded Japan is. More
than 7,500 Turkish Kurds
applied for refugee status in
2015 and not surprisingly, the
Japanese government has
“generously” granted asylum to
27 of them.
What does Shinzo Abe say
about all these ?
At the UN General
Assembly in Sep last year,
Shinzo Abe said “
the country
needed to focus on its economy
before considering whether
Table 1
Top six
economies
No. of refugees
and asylum
seekers hosted
United States
559,370
China
301,729
Japan
16,305
Germany
736,740
United Kingdom
168,937
France
336,183
to accept more refugees or
immigrants
”. For a country that
is facing a population that is
ageing and declining fast and
a working population that is
declining sharply (for details,
see last week’s
i
Capital), did
it not occur to Shinzo Abe
that accepting a lot more
refugees or immigrants may
be a solution to his country’s
economic mess ? Or is Japan
so racist and closed-minded
that allowing more foreigners in
is so completely anathema to
them ? And yet, Japan allows
so many American troops to be
stationed in Japan as if they
are permanent residents.
These facts point to one
simple conclusion that
i
Capital
previously wrote about. Japan
will become extinct before she
gets old – that is how serious
Japan’s demography problem
is.
Given Shinzo Abe’s
neo-Fascist approach, we
are simply perplexed at how
anyone can be long-term bullish
over Japan. Since Abe came
in late 2012, Japan’s economy
has not grown at all.
i
Capital
retains its bearish
short-term
outlook of the Tokyo stock
market at a range of 13,000 to
17,300 for the Nikkei Average.
See Stop Press for the latest.
i
Capital is retaining its bearish
longer-term
outlook of the
Tokyo stock market with the
Nikkei going all the way back
below the 10,000 level.
In 2010, Japan
started to accept
refugees who fled
from Myanmar from
camps in Thailand.
Since then, Japan
has taken 24
families. 24 families,
no typing error.
Hong Kong
Source: www.shutterstock.com
A Myanmar refugee boy in Thailand. In 2010, Japan started to accept
refugees who fled Myanmar from camps in Thailand. Since then, Japan has
taken only 24 families.
The Hong Kong stock
market has of late been
performing. Reason ?
China is back on the rescue
again. Tourists from China
are coming back to Hong
Kong, at least based on
Jul’s visitor numbers. In
the process, investors are
going back to the tourist-
and retail-related stocks,
many of which have been
bashed down in the last
1-2 years. Then, reassuring
corporate earnings, except
for airliner Cathay Pacific,
have provided an additional
reason for investors to
jump in. Stock prices of
Tencent, China Unicom and
Lenovo for example, surged
on better-than-expected
earnings release. Then,
the long expected program
between the Shenzhen and
Hong Kong stock markets
received government’s
approval, an announcement
that is certainly bullish for
the Hong Kong stock market,
as it leapfrogs Hong Kong
onto the top of the global
league.
As prime minister Li
Keqiang announced,
China’s State Coun¬cil
has approved a Draft Plan
for Implementation of the
Shenzhen-Hong Kong
Stock Connect. This comes
after the stock connect
programme between
Shanghai and Hong
Kong was successfully
launched in Nov 2014.
The Shanghai-Hong Kong
Stock Connect allows
foreign investors to trade
Shanghai’s A-share market
through stock brokers
in Hong Kong. Chinese
investors, meanwhile, are
able to invest in Hong
Kong’s H-share market via
mainland brokers.
For international
investors, the
Shenzhen-Hong Kong
Stock Connect, like the
Source: Shanghai Stock Exchange, Hong Kong Stock Exchange, Shenzen Stock Exchange
Shanghai-Hong Kong stock
connect programme, offers
greater diversity and choice.
The Shenzhen market
has far more technology
companies, start-ups and
privately-owned firms
than Shanghai, which is
dominated by traditional
economy sectors like
financials and SOEs. The
Shenzhen link will add
880 companies available
to overseas investors,
adding on to the 567
already accessible via
the Shanghai link. The
Shanghai-Shenzen-Hong
Kong connect is easily
one of the most exciting
developments in global
capital markets. Seen as
one stock market, it will be
the second largest in the
world, after the NYSE and
will offer an amazing range
of investment choices.
The announcement
of the Shenzhen-Hong
Kong Connect also shows
that the so-called market
crash of mid-2015 is
now ancient history; it
was merely a blip in the
long-term development of
China’s capital markets.
However, the whole
Shanghai-Shenzen-Hong
Kong Connect signifies that
China’s capital market is
advancing steadily towards
internationalisation with
many positive implications,
not just for China but for the
rest of the world as well. It
would also signal that China
is confident and comfortable
with the pace of capital
market liberalisation. Over
the longer-term, China’s
stock markets offer the best
upside potential.
In the nearer-term, the
Hong Kong stock market
would have to grapple
with the long overdue US
monetary tightening, which
for now is a very formidable
obstacle to cross. The
Shenzhen stock market has
a very low correlation with
the NYSE. For its
long-term
outlook, as
i
Capital has
advised previously, it will
review it at a later stage; for
now, the Hang Seng needs
to get through a difficult
patch first.
i
Capital retains
its bearish
short-term
outlook of the Hong Kong
stock market with a range
of 15,000 to 23,500. See
Stop Press for the latest. For
the
medium-term
,
i
Capital
expects the 15,000 level
to be broken and hence,
retains its bearish outlook
of the Hang Seng Index at a
range of 10,000 to 23,500.
By that time, the Hong
Kong economy will be in a
full-blown recession.
For international investors, the
Shenzhen-Hong Kong Stock
Connect, like the Shanghai-Hong
Kong stock connect programme,
offers greater diversity
and choice.
A
| Market Opinion
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Capital Dynamics Sdn Bhd