Japanese shares are getting cheaper faster than any developed market as global investors regain faith in the world’s third-largest economy, with valuations declining even as the benchmark Topix index rallies.
The price-earnings ratio for the nation’s companies dropped to 14.3 times estimated profits from 17.1 at the start of 2013 because the Topix’s 34 per cent surge, the biggest among 24 developed countries tracked by Bloomberg, has failed to keep up with analyst forecasts for 60 per cent income growth.
Bloomberg News reported on Sunday, that nowhere have valuations contracted faster than in Japan. Multiples have increased in the US, France and the UK.
Chinese firms hungry for overseas property investment
In another development, investments by Chinese firms in overseas real estate have grown spectacularly over the last three years, up from $900 million in 2010 to $5.6 billion in 2012, according to new figures.
According to reports by Propertywire.com, this year’s investment volumes have already exceeded those levels thanks to many high profile deals in key gateway cities, says the latest report from Savills Research China, with key cities like London, New York and Sydney regarded as safe investments.
The firm adds that this trend is likely to continue for many years to come as China further integrates with the rest of the world and new sources of capital gain traction in overseas markets. Investment volumes could conservatively continue to grow at 20% per annum over the next decade.