Although the Nikkei stock index returned to a record high last Thursday, individual traders increasing margin buying positions may pose obstacles to semiconductor manufacturers, electrical utilities, and some growth stocks.
Although the Nikkei stock index returned to a record high last Thursday, individual traders increasing margin buying positions may pose obstacles to semiconductor manufacturers, electrical utilities, and some growth stocks.
Although the unpaid margin buying positions announced last week have slightly decreased, the figure is still near the highest level in 18 years. This high-leverage trading behavior may affect the rise of the Nikkei 225 stock average index, which has a narrow coverage mainly consisting of large technology companies and growth stocks in Japan.
Chip manufacturers have always been the focus of the AI-driven buying frenzy, but this frenzy may be affected.$Tokyo Electron (8035.JP)$As Japan's largest supplier of chip manufacturing equipment, its margin purchases have surged by JPY 47 billion (approximately USD 0.293 billion) since the end of last year, the largest increase among the companies in the top 500 index of the Tokyo Stock Exchange.
After reaching a high in March and April, the performance of chip stocks such as Tokyo Electron began to weaken, which also led to the Nikkei index's underperformance since then compared to the Topix index.
Jun Kitazawa, deputy general manager of investment information at Mitsui Sumitomo Asset Management, pointed out that the prices of chip-related stocks have been limited. Closing margin positions may bring further pressure to these stocks.
For electric utilities, the impact of margin positions may be more significant, as their stocks have briefly risen due to market expectations of increased demand for electricity from AI-related chip manufacturing and data centers.
Since the beginning of this year, the stock price has surged by 171.5%, and this week it has once again topped the market cap list of US stocks. Although the stock experienced a significant pullback on Thursday, Bank of America believes that it still represents an attractive investment opportunity. Any dip in Nvidia's stock should be viewed as a chance to buy more.$Tokyo Electric Power (9501.JP)$The long margin position of $Tokyo Electric Power Co. (9501.JP)$ ranks eighth in the Topix 500 index.$Hokkaido Electric Power (9509.JP)$Shift Inc., an IT service stock favored by some investors, has continued to fall, and with the significant increase in margin buying, this may lead to investors being forced to stop-loss sell when the stock price further declines.
Other companies favored by margin investors include chip-related stocks such as
$Lasertec Semiconductor (6920.JP)$$Lasertec (6920.JP)$,$Disco (6146.JP)$,$Screen Holdings (7735.JP)$and $Mitsubishi Heavy Industries (7011.JP)$And.$Hitachi (6501.JP)$.
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