Tokyo Market Summary: The Nikkei Average Continues to Fall, Goldman Selects “Seven Samurai” to Support Japanese Stocks

Top news
“Seven Samurai” selected by Goldman, the driving force of the Nikkei Average
Goldman Sachs Securities recently selected 7 Japanese brands “Seven Samurai (Seven Samurai),” which are equivalent to large tech stocks called “Magnificent 7 (7 grand brands, M7)” in the United States. Expectations for improved capital efficiency of Japanese companies support the market price, and the basis for the Nikkei Average to be updated to the highest value is being prepared. Goldman is on the 18th $Screen Holdings (7735.JP)$、 $Advantest (6857.JP)$、 $Disco (6146.JP)$、 $Tokyo Electron (8035.JP)$、 $Toyota Motor (7203.JP)$、 $Subaru (7270.JP)$、 $Mitsubishi (8058.JP)$The 7 brands were tentatively selected as “Seven Samurai” by comparing them to world-famous films directed by Akira Kurosawa.

Corporate profitability improved, and price determination power gradually returned - boosted to the highest value of Japanese stocks
The profitability of Japanese companies is improving. From the financial results for the fiscal year ending 2023/10-12, which were almost complete, the effects of price transfer, which was carried out late while raw material prices were at a standstill, became apparent, and the appearance of companies securing profits was highlighted. Due to improvements in profitability, according to data compiled by Bloomberg, the net profit of companies adopting the Tokyo Stock Price Index (TOPIX) 500 recorded a record high of 13.9 trillion yen, up 46% from the same period last year.

The Financial Services Agency made a final plan with impact investment, and it is possible to balance improvement effects and profitability
The Financial Services Agency announced the final draft of guidelines on impact investing on the 19th. Businesses that aim for improvement effects on society and the environment are generally thought to have low profitability, but it was emphasized that it is possible to balance effects and profits. Discussions will be held at the review meeting on the evening of the 20th, and a formal decision will be made by the end of March. In the final draft, as changes in business models and technological innovation progressed, recognition was expressed that social/environmental improvement effects and business profitability “can complement and reinforce each other under various ingenuity, and become sufficient for a compatible relationship.” The idea is to promote dialogue between investors and companies by formulating draft guidelines, leading to the expansion of the impact investment market, which remains on a small scale compared to the world.

A revised bill is decided by the cabinet to make it possible to invest in crypto assets by domestic VC - to be deliberated by the Diet
A revised bill that allows domestic venture capital (VC), investment funds, etc. to invest in crypto assets has recently been decided by the cabinet. If the bill is enacted after deliberation in the current Diet, it will be possible to connect to startup support aiming to raise funds with crypto assets.

SoftBank G's 17 trillion yen British arm problem
Led by Masayoshi Son $SoftBank Group (9984.JP)$Is a major British semiconductor design company that makes a lot of money due to the artificial intelligence (AI) boom $Arm Holdings (ARM.US)$Thanks to holding 90% of the shares, it is in a great position in the AI field. Turning that good fortune into profit may be surprisingly difficult. However, if we take the past as a prelude, SoftBank will find a way to do it. In other words, there is a possibility that SoftBank stocks will follow an increase. At least until the fervor surrounding AI subsides.

PC shipments in January fell for the first time in 2 months, sluggish demand for individuals
The Electronics and Information Technology Industries Association (JEITA) announced on the 20th that PC (PC) shipments in January were 512,000 units, down 2.9% from the same month last year. This is the first time in 2 months since 2023/11 that there has been a decline. Demand for personal PCs was sluggish, which depressed the overall situation.

Notable stocks
KDDI-3 days of continuous growth to provide hazardous point visualization solutions with Toyota
$KDDI (9433.JP)$It continued to grow for 3 days. The company announced on the 20th $Toyota Motor (7203.JP)$In cooperation with, it was announced that provision of a solution (hereinafter, hazardous point scoring) that visualizes hazardous points by AI analysis of human flow and vehicle big data and open data such as past accident information will begin in the spring of 2024.

Sakura Internet - Backlash for the first time in 3 days, certified as a plan to secure the supply of cloud programs by the Ministry of Economy, Trade and Industry
$SAKURA Internet (3778.JP)$rebounded for the first time in 3 days. The company announced on the 20th that the company's “Sakura Cloud” technology development plan received certification today from the Ministry of Economy, Trade and Industry for “basic cloud program technology development support” of the cloud program supply assurance plan, which is a specific important material based on the Economic Security Law.

NYK Line - Zukushin first orders a worker carrier for offshore wind power generation from a domestic shipyard
$Nippon Yusen Kabushiki Kaisha (9101.JP)$It continues to grow. The company announced on the 20th that it ordered 1 worker carrier (CTV) for offshore wind power generation from Kosaba Shipbuilding Industry (Kamaishi City, Iwate Prefecture) in January. The ship is the company's first CTV to order from a shipyard in Japan.

Inbound-related sectors, such as travel studios, are sluggish, and cautious views on the Chinese economy after the Chinese New Year spread
$TABIKOBO (6548.JP)$Ya $Komehyo Holdings (2780.JP)$is soft. $Oriental Land (4661.JP)$Ya $Keisei Electric Railway (9009.JP)$Inbound-related things like that aren't clear. It became clear on the 18th that tourism revenue within China during the Chinese New Year period, which is China's major consecutive holiday, exceeded the level of 19 before the COVID-19 pandemic. Meanwhile, estimates have also been conveyed that tourism revenue per person decreased compared to the same period in 19. There are also pessimistic views on trends in the Chinese economy after the Chinese New Year in the market, and it seems that there is a sense of uncertainty about the further expansion scenario of inbound demand due to the recovery of Chinese tourists visiting Japan. Sporadic sales for the purpose of compressing purchasing holdings have become a burden on related stocks.