Nomura's Individual Investor Survey for August: Caution Prevails

Aug. 4.06 | About: Nomura Holdings, (NMR)

The securities arm of Nomura Holdings (NYSE:NMR) has released its August survey of individual Japanese investors (for direct access to .pdf click here). This month's survey shows that individual investors remain mostly optimistic with 80.7% out of 1,000 respondents expecting the Nikkei 225 to rise over the next three months. Overall, Nomura seems to think the results show Japanese investors remain rather cautious and are seeking value plays with medium- to long-term holding periods.

Extracts from Nomura’s Individual Investor Survey

Area of investment focus: Stock price movements and technical factors (13.7%), High earnings and growth (13.9%), Stable earnings and growth (46.4%), Dividends and shareholder returns (26.0%)

Overview:

    (1) Outlook on the stock market is mostly positive but surveyed trading activity decreased again on a monthly basis with investors seeming to take more a cautious approach — 80.7% of the respondents said they expect the Nikkei Average to rise during the next three months. Nomura gauges responses in 1,000 point N225 increments and of those expecting a rise, 37.8% responded for +1,000, 33.3% for +2,000, 6.9% for +3,000 and 2.7% for >+3,000.

    (2) Among market impact factors, geopolitical risk appears to be a main concern for investors

    (3) Information & telecommunications was the top choice as the most appealing sector; 2nd was resources; and 3rd was pharmaceuticals & healthcare replacing 'consumer related' from last month

Least appealing: Resources, construction & real estate, and financials

    (4) In the survey's feature question respondents gave mixed results on their views of JASDAQ and other startup markets. 32.6% of respondents said such markets are "attractive." 14.1% said they are "not attractive" due to volatility and potential fraud. 40.2% answered "neither attractive nor unattractive."

Top-5 Most Watched Stocks: (survey respondents were only allowed to choose 1 stock; Japanese tickers are 4-digit codes)

    • Toyota (ADR: (NYSE:TM), 7203)
    • Softbank (OTC: (OTCPK:SFTBF), 9984)
    • Tokyo Electric Power (9501)
    • Nippon Steel (5401)
    • Sony (ADR: (NYSE:SNE), 6758)