Article / 18 June 2014 at 9:27 GMT

Nomura drops from top equity picks on 20% run-up

Head of Equity Strategy / Saxo Bank
Denmark
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)
Nomura Holdings share price
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.

Chart

Top equity picks Asia Pacific












-- 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.
Download document

Quant Corner - Asia Pacific equities

1y
fxtime fxtime
A good call :-)
1y
Peter Garnry Peter Garnry
Thanks

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Show latest activity
Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail