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Why is JPMorgan (JPM) Attracted Toward Japanese Real Estate?
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In order to take advantage of Japan’s prevailing easing monetary policy, JPMorgan Chase & Co.’s (JPM - Free Report) alternative asset management unit wants to invest in the country’s real estate and infrastructure. The news was reported by Bloomberg.
Although the European Central Bank and the Federal Reserve have started tightening monetary policies, Bank of Japan’s Governor, Haruhiko Kuroda, plans to continue with “powerful monetary easing” in order to encourage positive inflation in the country.
According to the BoJ’s guidance for short-term interest rates and 10-year government bond yields, borrowing costs are expected to remain low in Japan.
The managing partner of JPMorgan Global Alternatives, Anton Pil, said, “Leverage is still very inexpensive in Japan, so you can use a degree of leverage to enhance returns. Many foreigners want to get exposure to Japanese real estate because the Bank of Japan is on a different schedule.”
In fact, Pil believes that as the Federal Reserve sells bonds with an aim to reduce its balance sheet, alternative asset classes are likely to attract more attention and become lucrative for investors.
According to Pil, since investors nowadays look for non-traditional forms of fixed income, which can generate cash as well as serve as an inflation hedge, the Japanese real estate and infrastructure is becoming more attractive.
However, Pil does not aim to use “significant” leverage. According to him, nearly 35% to 50% of leverage is sufficient. He stated, “If you go north of that, real estate doesn’t become the driver, but the leverage becomes the driver of your return.”
JPMorgan’s shares have gained 24.6% in a year’s time, outperforming 17.4% growth for the industry it belongs to.
Earnings estimates for Ameriprise Financial have been revised 6% upward for 2017 over the past 60 days. Its share price has risen 46.1% in the past year.
Farmers Capital’s earnings estimates have been revised upward by 5.3% for the current year in the past 60 days. Also, over the last twelve months, its share price has increased merely 0.1%.
Comerica Incorporated has witnessed an upward earnings estimate revision of 1.5% for the current year over the past 60 days. Also, its share price has seen a 24.4% rise in a year’s time.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Why is JPMorgan (JPM) Attracted Toward Japanese Real Estate?
In order to take advantage of Japan’s prevailing easing monetary policy, JPMorgan Chase & Co.’s (JPM - Free Report) alternative asset management unit wants to invest in the country’s real estate and infrastructure. The news was reported by Bloomberg.
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Although the European Central Bank and the Federal Reserve have started tightening monetary policies, Bank of Japan’s Governor, Haruhiko Kuroda, plans to continue with “powerful monetary easing” in order to encourage positive inflation in the country.
According to the BoJ’s guidance for short-term interest rates and 10-year government bond yields, borrowing costs are expected to remain low in Japan.
The managing partner of JPMorgan Global Alternatives, Anton Pil, said, “Leverage is still very inexpensive in Japan, so you can use a degree of leverage to enhance returns. Many foreigners want to get exposure to Japanese real estate because the Bank of Japan is on a different schedule.”
In fact, Pil believes that as the Federal Reserve sells bonds with an aim to reduce its balance sheet, alternative asset classes are likely to attract more attention and become lucrative for investors.
According to Pil, since investors nowadays look for non-traditional forms of fixed income, which can generate cash as well as serve as an inflation hedge, the Japanese real estate and infrastructure is becoming more attractive.
However, Pil does not aim to use “significant” leverage. According to him, nearly 35% to 50% of leverage is sufficient. He stated, “If you go north of that, real estate doesn’t become the driver, but the leverage becomes the driver of your return.”
JPMorgan’s shares have gained 24.6% in a year’s time, outperforming 17.4% growth for the industry it belongs to.
Currently, the stock has a Zacks Rank #3 (Hold).
A few better-ranked stocks from the finance space are Ameriprise Financial, Inc. (AMP - Free Report) , Farmers Capital Bank Corporation and Comerica Incorporated (CMA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for Ameriprise Financial have been revised 6% upward for 2017 over the past 60 days. Its share price has risen 46.1% in the past year.
Farmers Capital’s earnings estimates have been revised upward by 5.3% for the current year in the past 60 days. Also, over the last twelve months, its share price has increased merely 0.1%.
Comerica Incorporated has witnessed an upward earnings estimate revision of 1.5% for the current year over the past 60 days. Also, its share price has seen a 24.4% rise in a year’s time.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>