My portfolio return (week 6)
Last week was a big disappointment to me. My portfolio’s behaviour entering Friday’s trading was just perfect as I was beating the market by more than a 1% on the week. Friday’s trading day swept away all my hopes of over performing the Nikkei225 on the week. On the week My Portfolio is lagging behind the benchmark by 10 bps.
What is surprising when looking at the performance of my stocks is that even when the markets drops more than 3,5% on the week cyclical stocks continue to outperform. Investors are not giving up on the possible recovery in China. Komatsu and HCM are still looking strong and will be the first to benefit from a recovery in China. Mitsui & Co and Marubeni are surprisingly looking strong while oil price is still sliding at around 36$ a barrel. It could be a sign investors are looking already 6 months ahead, which would be a major difference from the past 5 months.
Japanese Banks have had definitely a very low correlation with their peers in Europe and US for couple months. Last week was another great example, when Banking Stocks were sold heavily in the US and Europe, Japanese banks outperformed the Nikkei 225 and it helped my portfolio with strong performances from Resona Holding (+5,7%) and Bank of Yokohama (-2,6%).
On the downside, after the profit warning at Toshiba, my portfolio got smashed by the profit warning at the insurer T&D Holding. It seems the company announced more write downs than expected from risky investment in the third quarter. The stock went limit down on last Friday and is still struggling this week. It is hard to get out of the stock right now since it lost already more than 25% in couple trading days. I will reconsider my investment in T&D Holding over the next few weeks but for now I decide to seat on it.
Kirin Holding’s third quarter results were disappointing, the company reduced its FY03/2009 Operating Profit by 17% due to a stronger than expected yen and lower demand for beer globally. Investors sold Asahi Breweries on the week too. However, I think it is a mistake since Asahi’s revenues are for more than 80% domestic and should remain strong. Also both companies have made headlines for potential M&A deals, which reinforces my opinion that both companies have strong balance sheets and will benefit from the recession by gaining more market share in the global beer market.
Finally, investors took some profit on Mitsui OSK Lines after a strong rebound the past couple weeks but the stock is rebounding already this past two days. Nippon Steel was sold last week after the company announced it will slash its price by 30% in FY03/2010 but it is not so much of a surprise since the demand for steel plunged rapidly lin the third quarter. However, Toyota indicated today it would raise its vehicle production by 30% over the next few months after inventories reach an unsustainable level. It is definitely positive news for Nippon Steel, Toyota’s main steel supplier.
I am still surprise to see my portfolio out-performing the Nikkei225 on the year, given its higher beta. It just shows, even though the market is still losing ground and testing last year lows, investors are already preparing for the next rebound. I am fine with my portfolio for now, but I could increase my beta in the next days if the market rebound from the support level as I think it will.
Have a good week.
| Ticker Bloom | NAME | SECTEUR | Weekly % gain/loss |
| 8308 JP | Resona holding | Banks | 5,69% |
| 2914 JP | Japan Tobacco | Food | 2,29% |
| 9437 JP | NTT Docomo | Telecom | -0,53% |
| 3382 JP | Seven & I Holding | Retail | -0,63% |
| 7267 JP | Honda Motor | Auto & Autoparts | -0,89% |
| 6674 JP | GS Yuasa | Technology | -1,11% |
| 9020 JP | East Japan Railway | Land Transports | -1,22% |
| 6305 JP | Hitachi Construction Machinery | Machinery | -1,67% |
| 2801 JP | Kikkoman | Food | -1,69% |
| 6502 JP | Toshiba Corp | Technology | -1,90% |
| 8031 JP | Mitsui & Co | Trading | -2,49% |
| 6301 JP | Komatsu | Machinery | -2,52% |
| 8332 JP | Bank Of Yokohama | Banks | -2,65% |
| 8002 JP | Marubeni Corp | Trading | -3,24% |
| Nikkei | Index | -3,68% | |
| 4063 JP | Shin Etsu Chemical | Technology | -3,70% |
| My portfolio | -3,79% | ||
| 8306 JP | Mitsubishi UFJ | Banks | -4,23% |
| 6302 JP | Sumitomo Heavy | Machinery | -4,71% |
| 9984 JP | Softbank | Telecom | -5,48% |
| 6701 JP | NEC Corp | Technology | -5,62% |
| 4568 JP | Daiichi Sankyo | Pharmaceutical | -5,74% |
| 5401 JP | Nippon Steel | Steel | -5,96% |
| 2503 JP | Kirin Holding | Food | -6,41% |
| 2502 JP | Asahi Breweries | Food | -8,75% |
| 9104 JP | Mitsui OSK Lines | Maritime Transport | -13,04% |
| 8795 JP | T&D Holdings | Insurance | -17,40% |