“It is said that the stock market stabilizes when there is a long-term administration, such as the Nakasone administration, the Koizumi administration, and the second Abe administration. Looking at the lineup of the new executive committee, we can see that they are paying attention to many areas and have a sense of stability. I think the sense of expectation for a long-term government will have a positive impact on the market.” (Hideki Wajima, economic journalist)
On October 4, Fumio Kishida, 64, president of the Liberal Democratic Party, was elected as the 100th prime minister. Although the Nikkei 225 has temporarily fallen due to the problems of the management crisis of the Chinese real estate giant Hengda Group, there is a growing view that “the movement in the U.S. market is not serious and it cannot be a Lehman shock-like situation” (stock journalist Genichiro Amami).
And the start of the new administration is likely to be a great boon for the market. Prime Minister Kishida’s signature policy is the “2035 Income Doubling Plan. This plan aims to raise the income of households raising children and those working in the medical and childcare sectors. Prime Minister Kishida has also stated that he will implement economic measures worth several trillion yen by the end of this year. There are stocks that will be revitalized by these various policies.
Many experts are talking about Fujitsu, a general electronics manufacturer. Mr. Sakae Tsuda, an economic and financial analyst, said.
“Prime Minister Kishida, in his policy statement announced at the time of his election as president, clearly stated that he would expand investment in national land reform by 15 trillion yen over five years in order to create new regions. Digital infrastructure is indispensable for regional development. I think Fujitsu, which has been involved in network systems such as local 5G from early on, has the potential to grow significantly in the future.
There is a market adage that says, “There is no selling in national policy. That’s how big an impact national policy has on the market. Hiroaki Konno, a securities journalist, tells us.
“Prime Minister Kishida is reviewing his policy of giving preferential treatment to the wealthy and distributing it to the middle class. There is a possibility that demand for housing will rise, and Sekisui House, one of Japan’s largest housing manufacturers, is a company to watch. Another good point is that Sekisui is introducing into its homes a next-generation indoor environmental system that reduces viruses and other pollutants through ventilation.
Prime Minister Kishida has announced the establishment of a 10 trillion yen fund by the end of the fiscal year to expand investment in science and technology. Tomokazu Murase, chairman of the board of RAKAN RICERCA, an investment information service company, said.
“Specifically, the government is expected to strengthen R&D taxation and investment tax breaks in advanced science and technology fields such as semiconductors, AI, quantum and biotechnology. Modalis, which is developing gene therapy drugs using genome editing technology, and Stellar Pharma, which develops, manufactures and sells boron drugs used in boron neutron capture therapy (BNCT), a radiation therapy for cancer, are considered to have room to grow. We should also keep a close eye on NF Holdings, which has developed a technology called ‘low noise system’ for quantum computers.
Some policies from the previous administration are likely to be accelerated by the new administration. This is the field of “decarbonization,” which is spreading worldwide. Mr. Wajima, the former president, said.
“The previous administration announced that Japan would be carbon neutral by 2050, and I don’t think the new administration will stop the trend of ‘decarbonization. I think Elex, which is operating five biomass power plants in Japan, and Renova, which is involved in a wide range of renewable energy, should be checked out.
Given the fact that his administration has just been inaugurated, Prime Minister Kishida has been referring to a wide range of policy areas. On the flip side, this means that there is potential for stock price increases in many areas. Taketsugu Kamitoshi, a.k.a. Takezo, a private investor, tells us.
He says, “Prime Minister Kishida is also focusing on supporting ‘small and medium-sized farms and family farms,’ which support Japanese agriculture, in order to improve food self-sufficiency. Kubota’s agricultural machinery continues to enjoy strong sales both in Japan and overseas, and Ceratec, which has developed the “Green Cloud” agricultural IoT solution that uses IoT technology to measure and record data from agricultural production and distribution sites for comparison and analysis, is also attracting attention.
Prime Minister Kishida has been emphasizing the importance of child-rearing policies since his election as president, and he plans to provide support for households with children in the 2020 Income Doubling Plan. The “child-rearing stocks” can be expected to grow in the future. Mr. Norifumi Okayama, president of Market Bank, said.
“JP Holdings operates a wide range of childcare facilities, including licensed and certified nurseries. Karada Note provides health apps for pregnancy and childcare. Welby operates welfare services for people with disabilities, including support for transition to work and after-school care services.
Mr. Kishida is expected to basically carry on the LDP’s past policies, as he will focus on balance. Mr. Okayama continues.
Mr. Okayama continues, “Prime Minister Kishida has made it clear that he will launch ‘GoTo2.0,’ an upgraded version of the suspended ‘GoTo Travel. This will be good news for travel-related companies such as H.I.S., a major travel agency, and KNT-CT Holdings, which owns Kinki Nippon Tourist.
Coronas in the spotlight
When “GoTo 2.0” begins, not only the travel industry, but many other industries will benefit from it like a gentle rain from a dry sky. Mariko Mabuchi, an economic analyst, tells us.
Mariko Mabuchi, an economic analyst, says, “If GoTo2.0 launches ‘GoTo Eat’ again, the restaurant industry will be in the spotlight. Gurunavi, which is known for its restaurant information website, is also worth watching.
Even though the number of infected people is decreasing, the countermeasure against the new corona remains the most important issue for the administration for the time being. There is no better time than now to check out medical-related stocks. As Mr. Amagai said.
“Mr. Kishida’s policy on the new coronas is ‘zero medical refugees. Medley and M3 are the two companies that are attracting attention as related issues. The former provides cloud services to support the operations of medical institutions, and even though the Mothers market as a whole has collapsed, its price movement has been strong. The latter operates “m3.com,” a medical information website for medical professionals, where the majority of doctors in Japan are registered members.
There are many other notable stocks related to the new corona. Kazuyuki Suzuki, a stock analyst, said.
Mr. Kazuyuki Suzuki, a stock analyst, said, “Shionogi’s main business is infectious disease drugs, and it is expected to play an active role in the field of new coronavirus vaccines and coronavirus therapeutics by utilizing its technology in the antiviral field. As for the coronavirus medication under development, we are planning to establish a supply system for one million people by the end of the fiscal year.
If the national policy makes a big move, the market will follow suit. There is no way to miss this opportunity.
From the October 22-29, 2021 issue of FRIDAY
Photo by： Takero Kizuna