Chip vendor winning streak shows foreigners coming back to Japan

(Bloomberg) – The uninterrupted rise in global demand for electronics, combined with the recent influx of foreign funds into Japanese stocks, has resulted in a record winning streak at one of the world’s largest suppliers of manufacturing equipment of chips.

The shares of Tokyo Electron Ltd. gained 1.6% to a new all-time high on Wednesday, marking a 15th consecutive daily advance, its longest winning streak on record according to Bloomberg data. The stock climbed 26% during that period, compared with a gain of 5.5% for U.S.-based Applied Materials Inc. and a 2.3% rise in the Semiconductor Index of the Stock Exchange. Philadelphia.

The Tokyo Electron rally is “symbolic” of foreign traders buying Japanese stocks, said Shuji Hosoi, strategist at Daiwa Securities Co. “Foreign investors have been buying large-cap and tech Japanese stocks since late August. They are avoiding them. US markets due to fears of a slowdown and money is moving instead to Japanese stocks, ”he said.

Foreign investors were net buyers worth 662.7 billion yen ($ 6 billion) of Japanese stocks and futures in the week to September 3, the highest number since February , according to data from the Japan Exchange Group Inc. Market watchers are hoping for a continued influx. from abroad amid optimism over a new government and declining Covid-19 infections as vaccination rates rise.

Foreign traders buy the most from Abenomics in a sugar-free Japan

Concerns about the macroeconomic outlook could push investors to buy chip-related stocks, which still benefit from demand related to 5G technology, digital transformation, automotive electrification and decarbonization, Kazuyoshi Saito said, senior analyst at Iwai Cosmo Securities Co. in Tokyo. He added that the Tokyo Electron rally could soon “take a break for a break” in the short term.

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