(Bloomberg) — Investors are hankering for more insights into Japan with the market becoming a hot destination for fund flows, and Wall Street banks are responding.
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Citigroup Inc. has intensified efforts to bring its Japan analysts to clients, while Morgan Stanley recently dispatched a large team to financial hubs in Asia. Bank of America Corp. has started a regular call between researchers and global investors.
Their efforts come as a resurgent stock market boosts demand for information about the country’s companies and economy. Foreign investors bought the most Japanese equities since 2013 last week.
Overseas marketing by analysts at Citigroup’s Japan securities arm jumped more than five-fold last year from the previous year and the momentum continues in 2024, according to Kota Ezawa, its head of Japan research. “Japan Day” events have been organized worldwide, where its country head, analysts, strategists and traders discuss investment opportunities in the country from the equity, fixed income and foreign exchange perspectives, the bank’s spokeswoman added.
Morgan Stanley’s majority-owned joint venture brokerage with Mitsubishi UFJ Financial Group Inc. sent more than 30 Tokyo-based researchers to Hong Kong and Singapore last month for a week-long visit, a spokesperson said. The tour introduced equity analysts, economists and strategists to customers after the two banks reorganized their research operations, as well as responded to global interest in Japan, he said.
Bank of America started a new quarterly call in January targeting institutional investors in the US, Asia, and Europe, the Middle East and Africa, a spokesperson said. Japan sector analysts cover their best stock ideas in the call, known as the Lightning Round, and it’s been well received by investors, the spokesperson added.
Japan’s economic revival is bringing back shine to jobs from bond trading to corporate analysis after their allure faded during the nation’s lost decades of deflation. Institutional investors in the country expect to use more research providers this year after reducing the number every year since 2019, according to a report from consultancy Coalition Greenwich.
“As the year unfolds, we will be watching to see if this continues and whether it will translate to increased execution spend and a boost in revenues for brokers and other research providers,” said Tarun Hariharan, a research manager at the firm.
There is growing interest in re-learning about Japanese companies and markets, said Hideyasu Ban, a Bloomberg Intelligence analyst. “Still, what would happen after the initial learning stage by investors runs its course depends on whether the market can maintain its appeal.”
For now, Ban sees the securities industry returning to an era where jobs in bonds, stocks and research are exciting again.
(Updates with Bank of America in the second and fifth paragraphs)
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