Tokyo's hosting of the Summer Olympics is five and a half years away, but investors need start tapping into this theme now, Citywire A-rated manager Richard Kaye has said.
The Comgest manager said companies based in or around the city are already making ambitious plans for the 2020 Summer Games.
Having just returned from a five-week stint in the country, Kaye, who co-runs the Comgest Growth Japan Yen fund, said now is the time for investors to get in on the ground floor.
‘When London was awarded the 2012 Olympic Games, there was a feeling of ambivalence and inconvenience, as many people thought it would cause more problems for residents and businesses,' he told Citywire Global.
‘In Japan, the feeling is totally different. The city, arguably more so than the wider country, is head over heels about hosting the Olympics in 2020,’ Kaye said.
This enthusiasm, the Paris-based manager said, was transferring to businesses. ‘Many have said they want to upgrade their facilities, their headquarters, ahead of the Games.
‘In areas such as railways, where we have some positions, there are also discussions about upgrades. This ranges from companies saying they want to upgrade stations, to upgrading lines and, in some instances, even added new lines in the five and a half years they have to do so,’ Kaye said.
Kaye, who said dismissed concerns over Japanese growth contracting earlier this week, said the Olympics could provide a ‘talismanic’ factor in aiding Tokyo, as well as surrounding areas, through broad infrastructure renewal.
In the Comgest Growth Japan Yen fund, which he co-runs with Chantana Ward, Kaye currently has his biggest exposure to consumer discretionary stocks, which make up 26.3% of the fund. This is ahead of IT (20.7%) and industrials (14.7%).
The Comgest Growth Japan Yen fund returned 74% in yen terms over the three years to the end of July 2014. This compares with a rise of 63.7% by its Citywire benchmark, the Topix TR, over the same period.