Japan: Nomura's August Individual Investor Survey

The results of Nomura’s Individual Investor Survey [pdf] for August show sentiment worsened further, because many investors were unwilling to buy stocks ahead of parliamentary elections held at the end of July.

Japanese indices subsequently dropped to multi-month lows and a growing number of stocks are now trading at calendar year lows.

Nomura closed its survey on July 23. At that point, the Nikkei 225 had fallen below 18,000 for the first time in several sessions, as bulls were unable to take the Nikkei to new highs (18,252 close set 7/10 and 18,300 intra-day 2/26).

The survey showed mounting concerns over domestic politics, Bank of Japan monetary policy and forex rates weighed on investors' minds.

The N225 dropped more than 400 points to 16,764 last Friday, for its lowest close since early March.

Nikkei 225 Stock Average chart as of Friday's (8/10) close:

Extracts from August's survey:

Most Appealing Sectors:

1. Materials (6th consecutive month at #1)
2. Machinery, Shipbuilding & Heavy Machinery (third "most" last month)
3. Resources (not among "most/least-3" last month)

Least Appealing Sectors:

1. Electricity & Gas (second consecutive month at #1)
2. Construction & Real Estate (ranked third "least" last month)
3. Financials (second "least" last month)

In its monthly feature question, Nomura asked investors about their exercising of voting rights at June 2007 general shareholders' meetings. About half of respondents said they exercised voting rights, mostly unchanged from last year. Among voters, there was a 6% increase (to 39%) in those opposing resolutions, with the most disapproval related to directors' compensation and retirement bonuses. Also, "few" investors voted against the introduction of takeover defense measures, a tendency unchanged over the past year.

Most-watched Stocks (top-10):

1. Toyota (TM) (JP: 7203)
2. Nintendo (NTDOY.PK) (JP: 7974)
3. Nippon Steel (JP: 5401)
4. Komatsu (JP; 6301)
5. Sony (SNE) (JP: 6758)
6. Tokyo Electric Power (JP: 9501)
7. Softbank (SFTBF.PK) (JP: 9984)
8. Mitsubishi Heavy Industries (JP: 7011)
9. Honda (HMC) (JP: 7267)
10. Mitsubishi Corp. (JP: 8058)

*ADR honorable mentions:
• Toshiba (TOSBF.PK) (JP: 6502)
• Canon (CAJ) (JP: 7751)
• Nomura Hldgs (NMR) (JP: 8604)
• Mitsui & Co. (MITSY) (JP: 8031)
• Mitsubishi UFJ Fin. Grp. (MTU) (JP: 8306)
• Mizuho Fin. Grp. (MFG) (JP: 8411)
• Matsushita Electric Industrial (MC) (JP: 6752)

Disclosure: The author does not own shares of any companies mentioned in this article.