Japanese stock market in 1989
TOKYO, May 22 The market capitalisation of shares listed on the Tokyo Stock Exchange's main board hit a record high on Friday, topping a year peak and marking one victory in Prime Minister Shinzo Abe's campaign to jolt the economy out of a long phase of deflation and stagnation. The total market capitalisation of the TSE's first section rose to Although the TSE's Topix index is still more than 40 percent below its peak, the market's size grew as the number of listed firms increased to 1, from 1, back then.
Investors say the market's fundamentals look much better now compared to 26 years ago, when Tokyo shares were traded at 60 times earnings. Ratios of price to earnings above 20 are often considered too expensive.
Today, Japanese shares are traded at around 16 times earnings on average, slightly less than Wall Street shares. This reflects the fact that Japanese companies overall have managed to grow earnings per share over time, despite effectively no nominal GDP growth over the past 20 years," said Tristan Hanson, head of asset allocation at Ashburton Investments in London.
s & War
Dividend yield on Tokyo stocks today is about 1. Back in , dividend yield was around 0. At the time, investors came up with many reasons to justify high valuations, such as Q ratio, which measures the company's value by including hidden gains on assets - a gauge that backfired when asset prices started to fall. In land prices are still over 50 percent below their peak in and still lower than The Japanese market of course is not a bargain anymore, but it is still inexpensive," said Michael Kretschmer, chief investment officer at Pelargos Capital in the Hague.
Still, unlike in the U.
Japan's Bubble Economy of the s |
The top constituents of the market haven't changed that much, showing lack of metabolism in the market," said Eiji Kinouchi, chief technical analyst at Daiwa Securities. The stock market has benefited in large part from the Bank of Japan's huge stimulus drive, in which it has bought exchange traded funds and its monetary easing has driven down yen, helping exporters.
NTT, a former national telecom monopoly that was the largest company in , is still ranked as the third, with its spin-off NTT Docomo coming at fifth. Japan Tobacco, another former government-owned monopoly, came in the fourth. The remainder of the firms that populate the top 10 include Toyota Motor and banks, just as in the late s.
The TSE's market cap now amounts to percent of the economy. Some investors think the market is at risk of correction when the ratio rises above the percent mark.
Japan's nominal GDP rose 1. DUBAI, June 21 Billionaire Saudi Arabian Prince Alwaleed bin Talal pledged loyalty on Wednesday to the kingdom's new Crown Prince Mohammed bin Salman, Alwaleed posted on his Twitter account.
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