Investment plan in Japan (2006)

Résumé du document

Our investment strategy in Japan: We are in charge of a Japanese branch of a foreign investment bank. We need to make an investment strategy for a 100 million US dollars in total. The investment term is 1 year for 50 million dollar and 10 years for the remaining 50 million dollars. Our goal is to gain higher yields for both 1 year and 10 year instruments. Consequently, as an introduction, we will first state the main differences between both short term and long term investment strategies, so as to decide in what kind of securities, and sectors to invest, depending on the investment length. Introduction: Actually, short-term investments are by definition designed to be made only for a little while, and hopefully show a significant yield. Short term investments can consist of stocks, bonds, etc. a company has bought and will sell shortly. On the contrary, long term investments are investments a company intends to hold for more than one year. They can consist of stocks and bonds of other companies, real estate, and cash that has been set aside for a specific purpose or project. Long term Investments also consist of the stock in a company's affiliates and subsidiaries. Long-term investments are designed to last for years, showing a slow but steady increase so that there is a significant yield at the end of the term. The investments made under long term investments may never be sold.

Extraits

[...] It has both high middle term growth perspective following the recent recovery of the financial institutions, and high long term growth opportunity especially for new financial instruments and thanks to the deregulation that enables Japan to become more specialized in financial services. Industrial materials and consumer goods represent 25% of our assets. They have high middle term growth perspective and are very safe. Health care, consumer services and business services represent 26% of our portofolio, they are a bet on the future Japanese economic structure. They are more concentrated on smaller companies and in sector that will become very important in the future. [...]

[...] Investment strategy in real estate 4. Investment strategy in high growth sectors' companies 5. Overall gains and rate of return I. Short-term investment strategy 1. Explanation of the 3 common short-term strategies There are several short-term approaches to investing you can use to increase your gains, though they also increase your risk of incurring losses. These include selling short, buying on margin, and momentum investing all of which are based on your assessment of what is likely to happen in the securities markets in the next few days or weeks. [...]

[...] But health food in Japan is even more lucrative. In 2003, they represented a market of nearly 600 million yen. This market is bigger than in many other countries like in Europe due mostly to cultural reasons. Life expectancy in Japan is the highest in the world. Japanese men have an average life span of 78 years and women 85 years. Japanese women have the world's highest life expectancy last 20 years. This is due to a special care to Japanese diets. [...]

[...] Let's first compute gains assuming we don't resell our yen at the end of the year: Gains: Stocks: $ Commodities: $ Securities: $ Total gains: $ Overall rate of return: (P1-P0)/P0 Overall rate of return = ( 50, 000,000)/ Overall rate of return = 13,15% Let's now compute gains assuming we resell our yen at the end of the year: Let us first convert the $6,575,000 into Yen with the current Yen to Dollar exchange rate 118.40 = $ x 118.40 = Now, let us assume a 103.00 Yen to Dollar exchange rate in one year. Our new gain is therefore: 778,480,000/ 103.00 = $7,558,058 Consequently, the new overall rate of return can be computed as follows: Overall rate of return = (57,558,058- 50,000,000)/50,000,000 Overall rate of return = 15% II. Long-term investment strategy 1. Explanation of the “Buy-and-Hold” strategy There are many long-term investment strategies. We decided however to implement a “buy-and-hold” investment strategy as far as many experts advocate it . [...]

[...] For centuries, the Dutch settlement in Deshima was Japan's only window to the outside world. When the bank established its first office in Deshima in 1858, it began the development of international trade and related banking services of modern Japan. Today, they have more than 200 full-time professionals in our branch in Tokyo. They offer a full-spectrum of products: from loan to e-commerce trade finance, from foreign exchange to structured finance, from risk advisory to derivatives, and from fixed income to asset management; to corporate and institutional clients, including multinationals overseas' units in Japan. [...]