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Financials/Banks
Japan’s benchmark Nikkei 225 stock average suffered historic losses for the 12 months through February, falling a record 44.4 percent, but the banking sector fared even worse, dropping 46.2 percent.
Hironari Nozaki Nikko Citi
second team Katsuhito Sasajima JPMorgan
third team Akira Takai Daiwa Institute
Japan’s benchmark Nikkei 225 stock average suffered historic losses for the 12 months through February, falling a record 44.4 percent, but the banking sector fared even worse, dropping 46.2 percent. The analyst who did the best job in the worst year was Nikko Citi’s Hironari Nozaki, who claims his sixth consecutive first-place finish. Clients say he has “the best contacts in the banking industry” and “a better feel for what managements of companies are thinking.” In September, Nozaki, 45, told investors to buy Resona Holdings, Japan’s fourth-biggest banking group, on the belief that the stock was undervalued in part because of “technical reasons concerning derivatives.” By the end of February the share price had gained 64.6 percent and outpaced the sector by a spectacular 105.6 percentage points. Katsuhito Sasajima of JPMorgan Securities Japan, who jumps from runner-up to second place, “is just more thorough than other analysts,” declares one buy-side backer. Sasajima upgraded the sector to outperform in April, and after it had gained 1.6 percent and was ahead of the broad market by 5.1 percentage points, in July, downgraded it to neutral. The sector sank 29.5 percent by October but still outpaced the Nikkei 225 by 4.1 percentage points over the period; citing rising credit costs, Sasajima downgraded it to underperform. By the end of February it had plunged a further 27.2 percent, trailing the broad market by 14.4 percentage points. Although he drops one notch to third place, Akira Takai of Daiwa Institute of Research continues to win praise for the way “he stays on top of the numbers,” as one money manager puts it. Takai also urged clients to buy Resona in September, at ¥1,180, after the bank announced a share buyback program. By the end of February the stock had shot up to ¥1,707.