18 June 2014 at 9:27 GMT
By Peter Garnry
Nomura falls from top list on surge
On May 7 we wrote a note that Nomura's valuation looked attractive on recent declines
and that the stock was our most bullish call in the Asia Pacific region. Our model had a 12-month return forecast of 30 percent and an uncertainty indicator of +5, meaning that our model was significantly more bullish than consensus. Since then, the stock has surged 20 percent (see chart) and as a result the stock has fallen out of our top list of equity picks in Asia Pacific.
Chart: Nomura Holdings share price since January 2014 (2-hour bars)
Source: Saxo Bank
Cyclical stocks dominate equity picks
Our list of top equity picks in the Asia Pacific region is dominated by cyclical stocks, with Mitsubishi UFJ and Sands China taking the two top spots (see table). Mitsubishi UFJ follows the model's preference for financials in Japan and the valuation looks very attractive at these levels.
Sands China has declined 19 percent since the peak in early March to levels where the valuation looks too good to be true, given the underlying growth rate. Sands China is the most interesting stock listed in Hong Kong right now.
-- Edited by Kevin McIndoe Peter Garnry is the Head of Equity Strategy at Saxo Bank. Please check out his articles and trades here on our exciting copy trading platform.