Japan: Best and Worst Performing ADRs Last Week and YTD

by: Steven Towns

Japanese ADRs trading on the NYSE/NASDAQ extended gains from the prior week to more than recover losses earlier in May that had pushed them into negative territory for the year (as a group).

Gains were broad last week, but recent winners could face some profit-taking, while indices may come under selling pressure as they are poised to retest multi-year highs set just ahead of the sell-off in February.

Sentiment is especially important since Japanese stocks are late to the global dance. Selling in New York or even Shanghai, could easily spillover to Tokyo.

Notice the yen now trading around 122 against the US$, effectively putting us back where we were in late February, at a multi-year low.

On average, the 28 Japanese ADRs gained a combined 2.6% last week. They are up a combined average 2.4% for the year.

Average weekly Japanese ADR returns over the past several weeks:

    05/18 - 05/25: +1.1%
    05/11 - 05/18: -2.6%
    05/04 - 05/11: +0.4%
    04/27 - 05/04: +0.6%
    04/20 - 04/27: -1.8%
    04/13 - 04/20: +1.5%
    04/05 - 04/13: -2.1%
    03/30 - 04/05: +1.3%

The five best performing ADRs last week:

    1. Internet Initiative Japan (NASDAQ:IIJI) 11.4%
    2. Kubota (KUB) 9.1%
    3. Mitsui & Co. (OTCPK:MITSY) 7.2%
    4. Trend Micro (TMIC) 5.2%
    5. Wacoal (NASDAQ:WACLY) 4.9%

The five worst performing ADRs:

    1. NIS Group (NIS) -1.5%
    2. NTT DoCoMo (DCM) 0.0%
        Matsushita (MC-OLD) 0.0%
    3. Konami (NYSE:KNM) 0.1%
    4. NEC (NIPNY) 0.2%
    5. TDK (TDK) 0.3%
        Advantest (NYSE:ATE) 0.3%

See the chart below for weekly and year-to-date returns.

Disclosure: The author owns shares of NIS Group and IIJ and also owns IIJ call options.

Click to enlarge chart


Note Trend Micro (OTCPK:TMICY) is the latest ADR to voluntarily delist from the Nasdaq. It is now trading on the pink sheets. I don't expect there will be much difference in its already thin trading volume. For Trend, the benefits are eliminating some costs associated with the listing and meeting SEC filing requirements. Shareholders should be a little concerned about Trend giving up on its listing dating back to 1999. Not to mention, there has been at least one SEC investigation related to senior executives in the past.