4 May 2023: Wealth Product Ideas
Japan Stock Theme
- Warren Buffet is considering increasing his positions in Japanese stocks.
- Berkshire Hathaway invested in Japanese stocks for the first time during the pandemic, namely Itochu Corporation (8001 JT), Sumitomo Corporation (8053 JT), and Mitsubishi Corporation (8058 JT).
- Japanese trading houses performed well due to rising prices, benefiting from a favourable environment for commodities.
- Buffet’s renewed interest in Japan may encourage other investors to increase their exposure to Japanese stocks.
- The Japanese equity market currently offers valuation discounts and lower sensitivity to interest rate changes, making it an attractive opportunity for investors to diversify their portfolio.
- Potential investment opportunities include the three abouvementioned trading houses and Sony Group (6758 JT), one of Japan’s largest market cap stocks.
Payout Scenarios:
- KO Early Redemption: principal + KO proceeds (knock-out event will only occur if all underlying securities close above the knock-out price)
- Redemption at maturity: Investors will receive the corresponding interest payment every month, if no KO event occurs, it will be:
- If the final price is higher than or equal to the strike price, the investor will receive a 100% cash return of their principal, plus eventually interest.
- If the final price falls below the strike price, the investor receives 100% of his principal, but in shares of the worst performing stock, and also receives final interest.
(Source: Bloomberg)
