Reuters Insider - Tax fears cast a pall over Tokyo market

Isetan (Singapore)

28/02/2014 16:16

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 http://insider.thomsonreuters.com/link.html?cn=share&cid=1204516&shareToken=MzpjZmY2MmVkZS0zODQ4LTRiMmUtYjFlOC02YjU1YzQxMjc1MjE%3D&playerName=ReutersNews 
                                                                       
 Source:             Thomson Reuters                                   
                                                                       
 Description:        A raft of positive data out of Japan has not been 
                     enough to break the market out of its funk, with  
                     an upcoming sales tax hike making investors       
                     nervous. But some stocks may actually be set to   
                     benefit.                                          
 
 
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Transcript (May be auto-generated)

 So just what will it take for the Tokyo market to stage a comeback? Despite a 
raft of positive data today, some factories boosting output and retail sales 
growing at their fastest pace since the March 2011 earthquake, the Nikkei barely
finished the week higher and still can't break free of the psychologically 
important 15,000 mark. It seems investors are looking beyond the pickup in 
demand to the sales tax hike due in April and are scared of a backlash. Just 
look at the department store sector, one of the biggest beneficiaries of the 
Abenomics boom. Shares of Isetan Mitsukoshi have dropped more than 20% from the 
start of this year on worries consumers will stop splurging on luxury items like
watches once the consumption tax rises from 5% to 8%. But there are also some 
companies that could benefit from the hike. Barclays has given discount retailer
Don Quijote an overweight rating expecting more consumers to gravitate to budget
stores. The outlook for convenience store operators like Lawson and Seven & I 
Holdings, which sells cheap meals and other daily necessities is also bright. So
although the tax hike has people worried, it will also create some investment 
opportunities. Unfortunately, that might not be enough to pull the wider Tokyo 
market out of its early year slump