The 2014 All-Japan Research Team: Equity Strategy, No. 1: Masatoshi Kikuchi

<The 2014 All-Japan Research Team

Masatoshi Kikuchi

Mizuho Securities Group

First-Place Appearances: 3 Total Appearances: 10 Analyst Debut: 2005

After spending last year in second place,Masatoshi Kikuchireclaims the No. 1 spot, and no wonder. "His knowledge is wide and deep," one money manager reports, "and he communicates clearly and logically." This is the 51-year-old strategist's first time planting the flag on top for Mizuho Securities Group, which he joined in September 2012. He foresees little near-term upside for Japanese equities, citing a muted outlook for U.S.-Japan bilateral talks that are critical to a proposed Pacific Rim trade deal and a government plan to select national, strategic special economic zones that would benefit from deregulation. Kikuchi does, however, forecast that shares will stage a year-end rally, driving the Nikkei 225 Stock Average up to 18,000. Following last year's run-up of 56.7 percent, the benchmark was down 12.1 percent year to date in mid-March, at 14,327.66. Corporate earnings should remain strong and are likely to be revised upward in the summer, he explains, because any economic harm from April's consumption tax hike should last only one quarter. In addition, if the June revisions to Prime Minister Shinzo Abe's policy agenda encompass "real reform" in such areas as encouraging foreign direct investment and cutting corporate taxes, the analyst says, markets will react positively. Against this backdrop, the sectors Kikuchi recommends overweighting include construction, electrical equipment, information and communications technology, machinery, sea transportation and select financials. "He's one of the best strategists I've worked with," concludes another supporter.