Category Archives: BUSINESS

Customised private investment trusts continue robust growth

Source: ijapicap.com

The business in privately placed investment trusts continues to flourish with the value of such vehicles rising 14.75% to 76.83 trillion yen in the year ending 31 March 2018, figures just released by the Investment Trusts Association and analysed by the Japan Pensions Industry Database show.

This growth rate compares with 10.56%, to 109.21tr yen, in publicly offered trusts and marks the second year in which the rise in the value of privately placed vehicles has outpaced that in the publicly offered variety (for which see posting below).

First established in January 1999, this type of investment trust was initially sold mainly to institutional investors but subsequent years saw demand for it growing among defined-contribution pension plans and investors in variable annuity products.

Market shares in these products are much more evenly spread than in their public counterparts where Nomura eats up a quarter of the business. Moreover the top 10 firms by growth includes four independents: Aristagora Advisors, Ichiyoshi Asset Management, Fivestar Asset Management and GCI Asset Management.

Full versions of the above table appear under the ‘Rankings tab above.

…continue reading

    

Thailand: beyond red and yellow?

Author: Editorial Board, East Asia Forum

A central feature of politics in Thailand has been the largely failed efforts of unelected governments to rid the country of the influence of Thaksin Shinawatra, the controversial yet electorally successful tycoon-turned-politician. As prime minister from 2001 to 2006, Thaksin crafted a tremendously effective political formula that involved simultaneously championing the interests of domestic capital and of the rural and working-class electoral majority. He achieved overwhelming electoral dominance during his term, and is to this day viewed as a paradigmatic example of Southeast Asian populism.

Armed Thai soldiers walk past members of the ‘red shirt’ group at an encampment in Nakhon Pathom province on the outskirts of Bangkok on 22 May 2014. (Photo: Reuters/Chaiwat Subprasom).

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There was plenty to dislike about the politics of Thaksin and his proxy successors. Thaksin oversaw a brutal ‘war on drugs‘ that presaged the bloodshed underway today in the Philippines. His dual status as prime minister and oligarch gave rise to brazen conflicts of interest. He regularly used his popularity to overwhelm the authority of independent institutions and made moves to browbeat independent media.

Such overreach became the ostensible pretext …continue reading

    

New apartment prices across greater Tokyo hit highest price since 1990

According to a report issued by the Real Estate Economic Institute on April 16, the average price of a brand new apartment across greater Tokyo was 59,210,000 Yen in fiscal 2017, an increase of 6.9% from 2016 and the highest level seen since 1990 when the average price peaked at 62,140,000 Yen. High labor and construction costs along with rising land prices have been a major contributor to the high sale prices of apartments in and around the capital.

A total of 36,837 brand new apartments were released for sale, a 1.1% increase from 2016 and the first increase seen in four years. This is still far short of the peak supply of 95,479 apartments seen in 2000. The average price per square meter was 864,000 Yen, up 7.9% from 2016.

The contract ratio was 68.8%, a 0.3 point improvement from 2016.

In Tokyo’s 23 wards, a total of 16,393 new apartments were released for sale, up 9.8% from 2016. The average sale price was 70,080,000 Yen, up 3.6% from 2016. The average price per square meter was 1,082,000 Yen, up 5.7% from 2016.

In Osaka City, 9,604 new apartments were supplied in 2017, up 28.0% from 2016. The average sale price was 36,140,000 Yen, up 0.7% from 2016. The average price per square meter was 729,000 Yen, up 5.0% from 2016.

New apartment sales for March 2018

In March 2018, 3,617 brand new apartments were released for sale across greater Tokyo, a 6.1% increase from March 2017. The contract ratio was 74.7%, up 8.5 points from last year and up 9.7 points from the previous month. The average sale price was 62,200,000 Yen, up 11.3% from last year. The average price per square meter was 907,000 Yen, up 14.8% from last year.

In Tokyo’s 23 wards, the average sale price was 70,940,000 Yen, up 7.0% from …continue reading

    

Assets managed by investment trusts hit over 100 trillion yen

Source: ijapicap.com

Assets under management in mutual funds offered by members of the Investment Trusts Association stood at 109.21 trillion yen at the close of the financial year on 31 March, 10.56% up on the previous annual term.

Of the 80 firms reporting to the ITA 39 recorded growth in assets above 10% while 41 came in below that level.

Industry giant Nomura pulled even further into the lead in assets under management, which reached 29.96tr, a climb of 8.4%, almost double second-ranked Daiwa which stood 15.59tr yen — making for a gap of 14.38tr yen compared with one of 10.89tr yen a year before.

Yet while Nomura bagged 27.44% of the total, compare with 25.70% last time and the top four took 63.90% against 62.12% in the year ending 31 March 2017, the longer term story may be among the smaller players.

Of the top ten firms by growth the five which were also among the leaders last year are relatively all new firms and their funds will soon be eligible to have their performance reviewed for compilations such as that from Thomson Reuters Lipper (see posting below).

They are JP Asset Management, Rheos Capital Works, Bayview Asset Management, GCI Asset Management (number one by growth last time) and Portfolia. Text continues after table

Among the others expanding at an above average pace it is perhaps surprising that Capital International, BNY Mellon and Resona have not achieved this status before now and both Money Design and Monex-Saison-Vanguard are too new to have anything like a track record.

While rankings give some idea of how movers and shakers are performing relative to …continue reading

    

Share house investment scam sees bank share price dive 20% in one day

The scandal surrounding a failed share house developer continues to grow this month as more information about dodgy spruiking tactics and falsified documents comes to light. As many as 700 investors from a single share house developer are facing potential bankruptcy, but the number of victims could easily rise as other investment-spruiking companies are put under the spotlight.

A lawyer representing a class action by investors against the Tokyo-based share house company alleges that the inflated price of the share houses sold to investors was determined by the maximum amount that the bank was willing to lend a buyer, rather than the true market price. A gross return was 8 ~ 9% was then applied to the sale price, even if it was higher than the market rent. The buyer would buy under the assumption that they could rely on stable, guaranteed rents that would provide them with a cash surplus each month. The high yield was only possible because the share house operator was providing a rental guarantee that far exceeded the rent they were receiving – causing the operator to lose money each month.

A fully-leased share house with 10 rooms might have brought in 340,000 Yen/month to the operator, but in order to show the appearance of a high yielding asset, the guaranteed rent paid by the operator to the property owner was 690,000 Yen/month. The loss to the operator could easily be offset by constantly selling overpriced properties to new investors. However, when the source of financing offered by a regional bank dried up suddenly in late 2017, the operator had trouble attracting new investors to the scheme, causing funds to dry up rapidly.

At some point along the purchase process, the documents submitted to the bank to obtain loans for the investors were fraudulently altered to show an …continue reading