Nikko trims global exposures

Tensions in the Ukraine and other factors have prompted Tyndall Investment Management parent Nikko Asset Management to trim its long-running overweight stance on global equities. 

The company said its Global Investment Committee (GIC) had been able to shoulder the various global risks since September 2011 and still maintain its overweight stance on global equities, but recent events had prompted a change. 

 “A major reason was the Ukraine tensions, but other factors also played a role in the GIC’s concern,” it said. “It has long maintained a cautious stance on China, and there are increasing signs of shadow banking defaults and declining residential property prices. 

 “On the other hand, certain segments of the economy will benefit strongly from the reforms even in the short term, and the GIC is by no means calling for a hard landing; rather, that economic growth will moderately disappoint consensus expectations. 

“As for other factors, fairly elevated US equity valuations and the strong rise in US equity prices over the last year also contributed to the GIC’s concern, especially as earnings growth will likely be hampered by the recent weather calamities.” 

Nikko said it was extremely rare that its GIC made ad-hoc decisions like and it was meant to be temporary until it met later this month in full session to make a final decision.