The Covid-19 pandemic has triggered changes in Japan that would have taken many years to initiate in less turbulent times. We believe there is significant value to be unlocked under such circumstances.
The pandemic has forced Japan to adapt to new norms overnight. Before, many segments had been caught in inertia under a risk-averse culture. However, risks from inertia now outweigh risks from implementing change as the 'new normal' dramatically transforms the corporate operating environment. Undervalued Japanese stocks Currently, 49% of the 2,000+ companies represented by the TOPIX index trade below book value, compared to 11% in the S&P 500 and 20% in STOXX Europe 600 index (see Figure 1, right). Firstly, the market still has some distance to go before recovering to pre-pandem...
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