Broker snap: Japanese trusts high enough

16th Nov 2009 13:59

Broker Killik Capital has cast its eye east to Japan where a pair of investment trusts have been narrowing the discount to net asset value.Melchior Japan trades at a discount of 9%, down from 36% last December, helped by stake building from arbitrageurs, says the broker.But Killik thinks re-rating upside is limited from current levels and remains cautious on the yen over the medium term.Meanwhile, JPMorgan Fleming Japanese Smaller Companies has narrowed its discount to 11% from 27% in March despite "consistently poor relative performance".Yen concerns and the limited re-rating potential also keep Killik cautious here.Japanese markets have rallied in line with the global recovery in stock prices, surging more than 50% between early March and late August. The Nikkei is currently up 39% at 9,791.