Details Cookies
Hong Kong S.A.R
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Japan and Greece: the two comeback countries Japan and Greece: the two comeback countries Japan and Greece: the two comeback countries

Japan and Greece: the two comeback countries

Peter Garnry

Head of Equity Strategy

Summary:  Japanese and Greek equities are part of this year's comeback story with these two equity markets up 16.5% and 31% respectively in local currency terms. Japanese equities are the talk of the town after strong endorsement from Warren Buffett highlighting the low equity valuations in Japanese equities. Greek equities are rallying 7% today as the market is excited about the re-election of the country's centre-right Prime Minister Kyriakos Mitsotakis.

Key points in this equity note:

  • Japanese equities continue to print new all-time highs up 16.5% this year as investors buying into the low equity valuation and potentially benefits from the US and China geopolitical tensions.

  • Japanese equities still have a lot of potential upside as they are valued at a 50% discount to US equities.

  • Greek equities are rallying 7% on the country’s election result extending the equity market gains this year to 31% as the country is coming back from the abyss.

The rise of the Japanese equity market

Back in April we wrote the equity note Will the sun rise over Japanese equities? highlighting Warren Buffett’s renewed commitment to Japanese equities which Berkshire Hathaway dipped into during the early days of the pandemic. Berkshire Hathaway wanted exposure to commodities but through a specific group of Japanese physical commodity trading companies due to strong market position and very low equity valuations. The bet turned out to be correct by Berkshire Hathaway and Japanese equities are overall up 16.5% this year in local currency terms and around 10.7% in USD terms. Warren Buffett’s marketing campaign for Japanese equities has worked well putting attention to this equity market in way we have not seen since Abenomics was introduced in late 2012. Japanese equities have delivered 270% total return in JPY terms since Abenomics was introduced. The long-term total return chart also shows how Japanese equities are now pushing hard into new territory.

The continuous tit-for-tat tactics between the US and China, with the latest being China’s ban of some of Micron’s memory chips, are also adding tailwind to certain “winner countries” that will benefit from fragmented supply chains. Japan has a good chance of being part of this group of winner countries together countries such as Mexico, India, Vietnam, Thailand, Indonesia, and Malaysia.

As we highlighted in our equity note back in April the Japanese equity market has healed from its bubble back in the late 1980s and since 1995 the Japanese equity market has gone from offering a 2%-point lower dividend yield compared to US equities to now offering almost 1%-point more lifting the expected return for Japanese equities. Measured on 12-month forward EV/EBITDA Japanese equities are also almost 50% cheaper than US equities adding the further upside potential of valuation multiple expansion which historically has been the rocket fuel of equity returns.

TOPIX total return index | Source: Bloomberg

If take a look at the industry groups that have led the gains in Japanese equities then those are Semiconductors (+46%), Consumer Services (+39%), Consumer Durables & Apparel (31%), Technology Hardware (27%), and Capital Goods (24%). If we go deeper into these industry groups then the single stocks that have had the most momentum are:

  • Renesas Electronics
  • Advantest
  • Zensho
  • Oriental Land
  • Sega Sammy
  • Sony
  • Daiwabo
  • Keyence
  • Kajima
  • Mitsubishi Electric

Investors like the Greek election result

Greek equities are rallying 7% to highest levels since 2014 (measured on the price index and not total return) following the Greek election result with centre-right Prime Minister Kyriakos Mitsotakis winning big over the opposition reducing political risks for Greece that has been through many ups and downs the past 15 years. The Greek equity market is up 31% this year and in total return terms the index is approaching the final peak in January 2011 before the severe austerity measures were implemented to avoid Greece failing as a state inside the euro area. From the lows in May 2012 the Greek equity market has now returned 186% or 10% annualized which is beginning to reach a level where those investors that dared to invest in the country during its darkest hours in modern history are being rewarded accordingly.

The equity market is a true vote of confidence to the new political class that is delivering results for the economy although the unemployment rate is still at 10.9%. But the unemployment rate has come down from 28.1% in 2013 and the current unemployment rate is where Greece was back in 2004. The comeback for Greece has been painful for the people and hopefully Greece will extend its good momentum. While the labour market has improved the real GDP is still 20% below its peak in 2008 highlighting that Greece experienced a traumatic economic depression. Despite the hardship I have a vivid recollection of my last visit to Athens back in 2014 where I met joyful people despite the hard times. There was a sense of the future could only get better. On a final note, it is worth mentioning that the debt-to-GDP, although still high, is at 171% the lowest since Q3 2015.
Athens Stock Exchange General Index total return | Source: Bloomberg

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged foreign exchange trading); Type 4 Regulated Activity (Advising on securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.