Insights

Investment Insights by our experts and thought leaders

How would a Korean crisis impact Japan?

While highly unlikely, we examine the potential impact on Japan of a major crisis on the Korean Peninsula.

Forbes: What Was Japan's Bubble Like In 1989?

“Japan's example should always provide a guide to investors to be wary of arguments that surges in risk assets to high valuations based upon huge monetary and fiscal policy stimuli, coupled with excessive confidence, even if long-lasting, are acceptable.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Japan in Motion: What does the future hold?

We believe that Abenomics is working, however we feel that its success cannot be determined by viewing government policy frameworks in isolation.

Green Bonds – The Next Global Disrupter?

Steve Williams, the Portfolio Manager responsible for Green Bonds in Nikko AM’s London office, examines how this burgeoning asset class is likely to develop into a mainstream part of global fixed income portfolios.

Forbes: Why The Yen Should Not Strengthen In A Crisis

“Any major crisis in the Northeast Asian region, especially one involving a crisis within Japan’s borders, is likely to be handled very aggressively by the Bank of Japan (BOJ), with it bending the rule-book as much as the Fed did during the Global Financial Crisis or as the ECB has done in the past five years.”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

View on the French Elections

Our team of our Portfolio Managers in London, one of whom hails from France, reviews the prospects and ramifications of this weekend's French election.

“We all have heard of the term 'interest rate repression' for how central banks have kept rates at ultra-low levels, but this has only been successfully maintained due to what I call 'inflation repression.'”

John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com

Japan’s Inflation and Monetary Policy Outlook

Our Tokyo Fixed Income team explains its view on the Japanese labor market and its effect on consumer inflation and Bank of Japan policy.

Value Investing now back in favour — Will this continue?

During the 2016 December quarter, we witnessed the value style stage a partial recovery after having underperformed for at least two years or so. Is this as good as it gets? Or will value continue to outperform after its initial recovery, after having being in the wilderness for some time?

China started 2017 with real momentum, following the property driven debt-fuelled stimulus of last year, and the blue skies a result of Government directives to curb pollution during March’s Central Government meetings. However, with an expectation of lower steel intensity sectors driving growth this year, what will this mean for Australia’s resource sector?

Five Charts to Watch

As commodity prices have risen, the Australian economy is set to benefit from these continuing gains.

Mispricing of Volatility in a Post QE World

Is Volatility too low and what re-pricing could mean for various asset markets

House View: Continued Economic and Equity Reflation

The Global Investment Committee remains optimistic about global economy and equity markets despite their recent strong equity rallies and increased political risks.

Move over OPEC, there is a new commodity cartel in town... China

China has had a significant impact on the supply side in two key global commodities during 2016. Going forward, look out for further actions from China on the supply side of commodities.

A Conversation on E.S.G. with a CIO

Yu-Ming Wang, Global Head of Investment and Chief Investment Officer, International on why a fundamental manager should care about E.S.G.

Japan’s “Show Me the Money” Corporate Governance: 4Q update

Given the release of the fourth quarter data, we update our decade-long theme about improving corporate governance in Japan.

The Real Trade War

There has been much concern lately about the new US administration’s trade policy. Taking a step back and looking at global trade numbers, we can draw a number of conclusions that might explain America’s new thinking on trade.

Asia Credit - A New Major Global Asset Class

Asia’s Credit market has come a long way since the Asian Financial Crisis of 1998, having evolved into a large, deep and liquid market.

Global Oil: The Recovery Continues

Our Senior Portfolio Manager in New York, who specializes in natural resource equity funds, explains the outlook for oil prices.

BREXIT: Firming up the Plan

As the UK’s pathway to EU exit evolves, one of our local portfolio managers outlines our current thoughts on the UK’s economic and political outlook.

Why ESG for Emerging Asia

Given the challenges, why bother?

What does Trump's First Week say about the Unorthodox Future Ahead?

Our head of Global Strategy in New York analyzes and forecasts the developments of major topics arising from the new Administration.

A Dynamic Approach to Managing Credit Risk

Global economic, credit and interest rate cycles are becoming desynchronised. In this paper, we introduce Nikko AM’s first generation default probability model for corporates.

Asian Credit Outlook 2017

In-depth report: Economic growth in Asia is expected to remain broadly stable in 2017. While there will be greater external uncertainties as well as country-specific challenges, Asian economies are, on balance, better equipped to deal with external pressures compared to a few years back.

Emerging Market Debt Outlook 2017

Our Senior Portfolio Manager for Emerging Market Debt in London forecasts that in 2017, this asset class could well match 2016’s achievement.

Turkey on a Knife's Edge

Our London-based expert on Turkey updates his views on the precarious situation there.

Global Credit Market Outlook 2017

As rates could rise further in 2017, we expect that a broad range of investment themes will help generate enough alpha performance to offset the rates impact.

Asia Credit - A Separate Allocation

Why Asia Credit should stand alone from Global Emerging Market Debt.

Global trade the key for Japan

As we start 2017, we expect the continued recovery in Japan’s economy will be driven by three factors outlined in this article.

Trump as Teddy Roosevelt

Trump certainly is non-conventional, in many ways similar to Teddy Roosevelt. Hopefully, Japan can adapt to this new reality, and instead of blocking Trump's initiatives, be able to have acceptable compromise “deals” ready.

House View: Bullish on Global Equities and the USD in 2017

Nikko AM's Global Investment Committee's 2017 Outlook — More Economic and Equity Reflation, Despite Less Dovish Central Banks

Japan Equity Market Outlook 2017

We believe that in an increasingly uncertain world, Japan’s less uncertain market will provide a compelling opportunity for serious investors.

Asia ex-Japan Equity Market Outlook 2017

The phrase “lower for longer” could well become unfashionable very quickly after years of central banks combating the forces of deflation and wishing for inflation instead.

Global Multi-Asset Market Outlook 2017

2016 may best be remembered as the year in which Trump won and the world changed. The question becomes which reforms will take centre stage.

Global Equity Market Outlook 2017

The cumulative positioning of investors in companies and asset classes that are deemed safe in a “lower for longer” environment is undergoing a significant test at present.

How Trump seals China’s policy trilemma

Our China Fixed Income expert in Singapore expounds upon how the Trump election is forcing China into taking specific economic policies.

Asia’s Coming Healthcare Boom

A combination of key regional factors—including demographics, urbanization and existing infrastructure gaps—all point to sustainable growth for healthcare in Asia ex Japan.

Five Charts to Keep an Eye On – Making sense of this unique investment environment

Following the US election, we have seen bond rates continuing to increase, a stronger US dollar, firmer commodity prices, and a US stock market at all-time highs. Is optimism around the US President-elect’s fiscal expansion masking the true deflationary picture?

Italian Referendum: Nikko AM Europe Fixed Income Commentary

We expect Italian assets to underperform until it becomes clear who will be able to form and lead a new government. Nevertheless the outcome of the referendum was already priced into financial markets.

Global Oil: OPEC – Blowout or Busted?

If the deal is adhered to then it is significant and will see the global oil market fall into under supply through 2017.

Japan’s “Show Me the Money” Corporate Governance: 3Q update

Given the release of the third quarter data, we update our decade-long theme about improving corporate governance in Japan.

Global Emerging Markets: Possible Impacts from a Trump Presidency

Following Trump’s election, our Emerging Market team in London, supported by John Vail, our Global Chief Strategist, discuss what, at this early stage, we can potentially expect to see from the US regarding its relationship with Emerging Market economies.

Global Oil: November Could Be Critical

Our oil experts in the US and London analyze the Saudi oil conundrum.

Asian Markets in the Wake of Trump’s Triumph

Our Senior Portfolio Manager for Asian equities reflects on Asian markets in the wake of Trump’s Triumph.

Trump Win: Surprise, but Not an Accident

Neither Brexit nor Trump’s win was an accident – ‘the people’, in particular the working and middle classes, are purposefully and deliberately giving the political elites a thump on the nose.

Political Revolution Hits America

Much like the BREXIT result, Americans surprised the consensus with an anti-establishment vote.

Populism and Strongman Rule - Is Duterte a role model for ASEAN?

Our Senior Portfolio Manager for ASEAN equities reviews the trend towards Strongman rule in ASEAN.

What Challenges Lie Ahead for the Healthcare Sector?

Advances in science and technology are continuously changing and progressing the medical profession and broader healthcare industry. While the industry growth will be strong, not all participants will fare equally.

Hard Brexit? Keep calm and carry on — 04 Nov Update

Simon Down, one of our senior fixed income portfolio managers in London, gives his latest analysis on the evolving Brexit situation.

Earnings recovery is much more achievable in EM Asia than LatAm or EMEA

Our Multi-Asset portfolio manager based in Singapore reviews the prospects for profit margin expansion in the three main Emerging Market regions.

Hard Brexit? Keep calm and carry on

With several months passing since the UK referendum on EU membership, two of our senior fixed income portfolio managers in London, Simon Down and Holger Mertens, update their views.

It has continued to be a wild roller-coaster ride for investors, and unfortunately, it is not likely to be very calm for the foreseeable future. Investors must keep a keen eye on geopolitical risk and be ready to act if such appear to accelerate into a situation that could significantly impact markets.

Interpreting Signals in Unprecedented Times - Japan Equity Market Outlook

No turning back — 2% inflation target not only intact but enhanced with a new “inflation overshooting commitment”

'Peak oil' to 'Peak demand': Implications for global investors

Although it is tempting to join the ‘peak demand’ bandwagon, as investors it is important to understand the impact that different technologies (and their timing) have on energy prices.

Will Japan Exit the UK?

Our UK expert on BREXIT and our chief global strategist respond to Japan’s concern about its investments in the UK.

Only central banks can break the cycle of ever-declining bond yields

QE policies have had a material impact on bond yields and valuations. We believe that the evolution of these policies will be more important than fundamentals in indicating when bonds can break the cycle of ever-declining yields.

More Radical Central Bank Policies and Implications for Stock Picking

Given how important central bank policies are for the pricing of assets, our focus has to be on what they do next. If debt monetisation were to occur, it would have significant implications for equity investing.

Electric Vehicles: Are they disruptive?

In our view, electric vehicles will have significant implications (both positive and negative) for many sectors, particularly automotive and oil, presenting investors with interesting opportunities, particularly in Asia.

A deeper look into Japan and China's debt problems

The prevailing market view on the region remains negative, mainly centring on China's debt problem and general doubts about Abenomics. We focus on some aspects of this negativity from a sovereign balance sheet perspective and conclude that the potential dangers are overstated.

Implications of low and negative rates for multi-asset investing

Sovereign bonds have traditionally played the role of a defensive, safe haven asset. But if they no longer provide the safety buffer that they once did, how can we best position multi-asset portfolios to mitigate downside risk?

Why it matters: Nigeria's Global Oil Impact

Oil production in Nigeria has been severely hampered in recent months as local militant group, the Niger Delta Avengers, have committed numerous attacks on oil pipelines in the region, materially lowering the country’s oil production. Our Emerging Market (EM) debt team in London take a closer look the political situation in Nigeria, the origins of the conflict, prospects for its potential resolution and its impact on global oil prices.

Is this the end of the 35-year bond rally?

Many market commentators have been speculating that we are finally coming to the end of the bond rally that has endured for the past 35 years. It's worth noting that this is nothing new—we have heard similar suggestions many times before over recent years.

Japan’s “Show Me the Money” Corporate Governance

Given the release of the second quarter data, we update our decade-long theme about improving corporate governance in Japan.

Hitting the Mark: Can Third Arrow Reforms Benefit Investors?

Japan is a consensus-driven culture and improved corporate governance is now the consensus. There are clear signs that many companies are moving towards more shareholder-oriented management.

India – Modi Magic, the GST Game Changer

The CEO of our Indian joint venture and our senior EM portfolio manager in London analyze the great importance of recent legislative developments in India.

Fintech – Disruptor or Saviour?

Our expert on Asian financials describes the exciting technological developments that will change the way we all do business in the future.

Erdogan Hammers the Parallel State

Our expert on Turkey details his cautious stance on Turkey's near-term future.

Bias and Staying Power in Investing

Having great ideas is just a beginning. Experience and execution are the requisite ingredients to turn ideas into real performance.

Japan's Election: Abe's Continued Focus on the Economy

Our Chief Strategist in Japan shares his views on political landscape and the economy.

Attraction of Emerging Market Debt

Emerging Market reforms won't stop or pause with the current market recovery.

What does Brexit mean for Emerging Markets?

Following our analysis of the recent UK vote, our Emerging Market debt team in London discusses Brexit's potential ramifications for this asset class.

Abenomics hasn't failed yet, but it does face global headwinds

Many are wondering if it's time to give up on Abenomics. While some of the scepticism is understandable, we believe it is too early to throw in the towel.

BREXIT, BREXIT! Where’s The Exit?

Two of our senior portfolio managers in London update their earlier pieces on what lies ahead for what should be a long-drawn out BREXIT path.

Slowdown but No Global Recession, with EU Cohesion, but Struggling UK

Nikko Asset Management's Global Investment Committee’s post-BREXIT scenario, including market and economic targets, is on the moderately gloomy side.

Brexit: Outlook for Global Fixed Income & Credit

Uncertainty after Brexit vote, but the correction in valuations and market volatility could provide buying opportunities in some fundamentally strong credits.

Brexit: Where to now for markets?

Although it is still too early to determine the full implications of Brexit over the longer term, in the short term, we can expect significant market volatility as uncertainty prevails, but this does not mean that investors should panic.

‘Helicopter money’ could prove effective, but it entails significant risks

The leader of our Multi-Asset Team expounds on the potential benefits and risks of ‘helicopter money’ in Japan.

Brexit: In or Out? The Final Run In.

Two of our senior portfolio managers in London update their earlier piece on BREXIT with numerous points of great interest on this crucial topic.

Global Oil Update: Continuing positive outlook or flash in the pan?

Our oil experts in London and New York update their bullish views in January with new facts, while retaining their positive intermediate-term view on oil prices.

Japan’s Financial State is Maintainable

Our Chief Strategist in Japan explains why Japan’s government debt situation is sustainable.

Fed rate rise most likely in September, but could be delayed until 2017

Our global rates and currencies strategist in Australia lays out his dovish Fed scenario as an alternative to our house view. In it, he expects the Fed to wait until September or later to raise rates, and states his case that the Fed’s actions do not affect US bond yields.

Liquidity Fears May Prompt a Market Rethink

We believe it is time to reassess market attitudes towards liquidity. We may have to start moving towards a model where investment horizons and liquidity expectations are more appropriately matched to the asset classes being invested in.

EU Refugee Crisis: European Weak Points and Outlook

Our London-based portfolio manager, Simon Down, and his colleagues review the refugee crisis that is turning European politics into a "hornets' nest."

Emerging Markets: Are we there yet?

Our two leading Global Emerging Market debt experts, both based in London, weigh the possibilities of a sustained upturn in this long-suffering asset class.

Abenomics is Alive and Well

Our Chief Global Strategist explains the reasons why there is too much unjustified pessimism about Abenomics.

The Subtle Shift in Asian Currencies from the Dollar to the Renminbi

Our Asian currency expert discusses the potential ramifications of the increasing CNY-orientation for Asian currencies.

Which Matters More for Credit Spreads: Fundamentals or QE?

What is more important for credit spreads in the current environment: the fundamentals or central bank actions? Our research suggests that since 2010 the answer has been central banks and, in particular, the US Federal Reserve.

Trends in Global Advertising: Mobile Still Underappreciated

The global advertising industry is undergoing a rapid transition. Advertisers are currently under-allocating to mobile advertising, and there are some companies that are well placed to take advantage of this trend.

Global Credit Outlook

For the next 12 months, we are quite positive on performance prospect for global credit, singling out five investment themes.

Global Banks: GFC-Style Systemic Contagion Unlikely

With banks using negative interest rates and their stocks plummeting, many are wondering if the world is headed into another recession. Though things may seem grim, the truth is that another recession seems to be unlikely.

Is Now the Time to Invest in Brazil?

Since 2011, Brazilian assets have re-priced to the downside. Given the size of the adjustment – both in commodities and assets – the question is whether Brazil is now presenting attractive investment opportunities.

G-3 and Chinese Economies Moderately Firmer in 2016

Nikko Asset Management's Global Investment Committee met on March 29th and updated our intermediate-term house view on the global economic backdrop, central bank policies, financial markets and investment strategy advice.

Fed in June and December, but ECB or BOJ Slight Easing

We expect June and December Fed hikes, but only mild further easing ahead for the BOJ and ECB. Meanwhile, we expect oil prices to creep higher through 2016 despite the stronger USD due to relatively firm economic developments in China and the G-3.

We expect that global equity and bond investing will be positive for Yen based investors due to Yen weakness, but for USD based investors, we are taking only a neutral stance on global equities due to a cautious forecast for US equities, whereas we are positive on Asia-Pac ex Japan, Japan and Europe. Meanwhile, we are moderately negative on bonds in each region when measured in USD terms, so we underweight them.

ASEAN: Reversal of Fortunes?

Our Singapore-based Fixed Income Portfolio Manager details the reasons for ASEAN’s recent rebound and why such should continue.

Scones or Croissants? Brexit: The Route to Exit and Key Risks

Although the current polls do not indicate a clear majority outcome, in this piece we will examine some of the issues that may cause sentiment to shift towards a Brexit, and what the UK leaving the European Union might mean for the UK and EU economies post breakup.

Is it time to get back into credit?

While a recession in the US is not our base scenario, the impact of such an event on credit exposure is worthy of consideration. In our historical analysis we've found that the driver of past recessions can provide important insight into which credit maturities are most attractive.

Globalisation has reduced US monetary policy independence

US monetary policy grows less independent as 2016 unfolds and risks to global growth abound in a rebalancing China, a deflationary struggle in Europe and whispers of a Brexit.

Japan's "Show Me the Money" Corporate Governance - March 2016

Our global strategist sheds light on how corporate profit margins are reflecting the continuing improvement of corporate governance in Japan.

Our Global Credit Strategy: Seeking Services

Our Global Credit staff in London detail their rationale behind concentrating on service sector exposure globally.

Multi Asset Strategies to Capture Growth with Lower Volatility

The changing shape of China's economy