Equity advisor Ryuichiro Kitahama
“Reaching a new all-time high with the support of “5+one””
●The first half of 2024, you want to bet on, there will be ups and downs in the second half
Happy New Year. Thank you for your continued support this year.
So, what will the market price be in 2024? One clue to the prediction is when last year’s stock price support material expires. So what factors pushed stock prices higher last year? I’ve introduced this many times, so some of you may remember it, but I’ll list it again: There are 7 main ingredients.
(1)Many companies expect an increase in sales and profits
(2) The new NISA (tax exemption system for small investments) starts from the new year
(3) The Bank of Japan continues large-scale monetary easing
(4) The Tokyo Stock Exchange requires companies with a PBR (price-to-book ratio) of 1x or less to improve their capital efficiency.
(5) Towards the end of the year, mutual funds are launched one after another
(6) Inflation concerns are easing in the United States and monetary policy is moving towards lower interest rates.
(7) Foreign investors have continued to buy Japanese stocks net (spot) since the fourth week of October.
Some of these items have already reached their expiration date. (5) is the same, and (7) is also highly questionable. Foreign investors have been net sellers for three consecutive weeks starting from the fourth week of November, and have been net buyers for two consecutive weeks since then, making it unclear.
This means that five of the seven main ingredients have not yet reached their expiry date, and it is safe to assume that these will continue to retain their power for 24 years and will be a factor driving share prices higher for at least the first half of the year.
Furthermore, there is actually another important source of support for stock prices. I tend to forget they exist, but I continue to buy trading companies. This will be all.
The bottom line is that companies are buying their own shares, and since they have made net purchases for 12 consecutive weeks, corporate companies are actually more reliable than foreign investors who repeatedly buy and sell. It is unthinkable that this trend will reverse again in 24 years. This is because listed companies are becoming very proactive in share buybacks as a way to return profits to shareholders.
From the above, there will be “5+one” stock price support material for 2024 and we have high expectations. As a result, the Nikkei Stock Average is expected to return and surpass its all-time high of 38,915 yen no earlier than the first half of this year.
That’s my baseline scenario, but if the stock price doesn’t reach its all-time high by the summer, there’s a risk that it will get crushed by intense summer heat, so it will likely get pushed back into the second half of the year. year.
Additionally, as summer winds down, there is a risk that the US market will be turbulent due to the presidential election. There is a high possibility that former President Trump will run again and the Tokyo market may also be affected by the turbulence, so it is better to invest in stocks in the first half of the year.
●What is the future of growth of semiconductor-related industries? Impact of strong yen to watch
So what will happen to the market? The first thing to consider is whether semiconductor-related stocks, which have been the driving force in 2023, will be able to maintain their upward trend.
The key is Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), a world leader in semiconductor contract manufacturing.
Normally, when thematic stocks that dominate the market rise from the bottom, the rise rarely ends in a year, but lasts two or three years. From this perspective, it is not surprising that the rise in semiconductor-related stocks will continue for at least another year, just as the rise in domestic semiconductor-related stocks, especially advanced semiconductor-related stocks, will continue.
However, there is a high possibility that the dollar-yen exchange rate will appreciate against the yen in 2024, and this must be taken into consideration. While the strong yen directly affects auto stocks, Toyota Motor Corporation <7203> [東証Ｐ]Bridgestone, a car brand, included <5108> [東証Ｐ]This is cause for concern, as even well-performing stocks, such as , could see their upward momentum slow.
On the other hand, many consumer-related stocks are far from booming in 2023, but in addition to the benefits of the strong yen, the wage increase of around 5% in the spring unions can be seen as almost certain, therefore correlated supplies are It will be a support material.
Based on the above, we selected promising stocks and discovered the following.
◆Kitahama recommendation “10 stocks to hold in 2024”
○Sumitomo Forestry <1911> [東証Ｐ]
With the United States moving toward lower interest rates, home construction in the country, which had stalled for a while, is starting to pick up. The company has strong brand power for wooden house construction not only in Japan but also in the United States, so it can be considered a significant contributor to increasing profits.
○Kosaido Holdings <7868> [東証Ｐ]
Although many elderly people are healthy, the number of deaths will increase as the population ages. The company operates crematoriums and funeral halls at six locations in Tokyo. The business is likely to continue to perform well in the coming years and the stock is promising.
○Daihatsu Diesel <6023> [東証Ｓ]
Daihatsu’s inspection fraud was shocking. Normally it would be impossible to close the entire factory. If it wasn’t under Toyota’s umbrella, it would be no wonder it went bankrupt. The company, which is a subsidiary of Daihatsu, is also in serious trouble, but with Toyota’s backing, it is unlikely to go bankrupt, making it a candidate for investment in a long-term perspective.
○Ｒｅｃｏｖｅｒｙ Ｉｎｔｅｒｎａｔｉｏｎａｌ <9214> [東証Ｇ]
Developing a business specializing in visiting nursing services. The company is still young, having listed in February 2022. I had a nurse come to my house and she was very helpful. It seems that the number of inquiries for this company will increase in the future, so it is an important sign now that the stock price is at its lowest point.
○ＧＥＮＤＡ <9166> [東証Ｇ]
The company has grown through active mergers and acquisitions in the entertainment industry. The company continues to actively operate its business and has even acquired a company that sells lemonade and popcorn. Of course, this is for the further development of the entertainment industry and we look forward to its future growth.
○Sect <3741> [東証Ｐ]
He specializes in developing software for robots capable of operating in the fields of space activities and autonomous driving. The space business may seem like something distant and unrealistic, but countries around the world are already working hard to occupy space. There’s plenty of room for the company to succeed, and even though the stock price is on the high end, it’s worth paying attention.
○District <6823> [東証Ｐ]
Fortunately, I currently have no hearing problems, but if I have problems in the future, I will probably use hearing aids from this company. It is the number one company in the hearing aid industry, and as the population continues to age, it is natural to expect the number of people using the company’s hearing aids to increase. Stock prices are expected to rise further.
○Jtec Corporation <3446> [東証Ｐ]
Not everything semiconductor-related has risen in 2023 and JTech/C has been forgotten. However, the company is strong in producing next-generation polishing equipment and has already received orders for prototype machines. We can expect more investors to realize this in 2024, and the current low price range is attractive.
○Broad-reaching media <4347> [東証Ｓ]
A company known for its video, text and other delivery technology. Even if you can create a video, being able to distribute it smoothly is another matter. In addition to BS broadcasts, the company provides a correspondence high school class distribution service, and the number of schools and students using the service is increasing. Stock prices are expected to start rising from the bottom.
○Canon Marketing in Japan <8060> [東証Ｐ]
Canon, as is clear from the company name. <7751> [東証Ｐ]It is an affiliated company. In addition to selling printers and cameras, we also provide IT and data center management services. Earnings are strong, and while the share price is clearly in the high range, we believe there is a high probability that the stock will continue to grow.
Diary of December 29, 2023
★From New Year’s Day to the 4th, we will deliver 27 “New Year Special Features” of 2024 all at once. Please stay tuned.
→→ Consult the list of articles in “New Year’s Special”
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2024-01-01 00:00:00
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