Investing in Japan? While uncertainty rules the markets, “smart money” is buying Japanese companies
- By Chris Ellis Senior Partner New Frame KK
The Covid-19 virus has shaken up the world, and uncertainty and fear have become normal. But, those who are brave enough to think long term are finding opportunities everywhere. Before the virus became a significant threat, the Japanese markets had been in a boom period, especially with the lead up to the 2020 Tokyo Olympics. Retail and tourism were at all-time highs and 2020 was shaping up to be a record year in every way.
Unfortunately, we all know what happened and we are experiencing a time of uncertainty and unknowns. Japan had taken a double hit with the delay of the Olympics, and while the virus has not spread in Japan like other countries, many expect it will.
Those who can see past the virus are extremely bullish on Japan, and now that the Olympics are delayed until 2021, there is optimism that the world will recover and this will be the most-watched and most important Olympic games ever.
For those that see opportunities, there is a shiny silver lining to this crisis, and companies that are brave enough to invest now will reap the rewards. At New Frame K.K., we have in the past week seen global investors register record interest in investing in Japan, especially within the service and tourism industries. The “smart money” investors are watching and waiting for undervalued and distressed companies to come onto the market and their checkbooks are open and willing. These investors know that once there is a medical solution to the virus and the problems it is causing, or just the slow course of time, things will improve. The world has had crises’ in the past and it will have more in the future, but people, and markets, adapt.
Contrarian investors think long term, and they never let a crisis go to waste. It takes a brave investor, or some would say a logical one, to buy a recruiting company during one of the largest stock market crashes in history. But, companies that rely on monthly or quarterly invoicing are going to be distressed very soon and many business owners are taking the option of selling and retiring, making this even a once in a lifetime buying opportunity. The service industry will not disappear, and the needs of their customers are not going away. A company that was valued at USD 5 million in January might be on the market for 3 million now.
If you are a business owner that is stressed or worried about how to plan or prepare for the coming months, or you want to know what type of government assistance is available in Japan we can help. We are consulting small and medium-sized business owners on what they can do to manage this crisis. For more information please contact us at firstname.lastname@example.org or visit our website www.newframe.jp
For business owners who are interested in selling or finding investment partners, we are open for confidential discussions. Now is the time to act and plan for your future. For investors or business owners looking to expand their operations or footprint in Japan, we have companies looking for opportunities.
New Frame K.K.