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Enoch Yiu

Yuhi Horiguchi, like many fellow Japanese, likes speed and efficiency. His frequent trips to Hong Kong are perfect, combining business, shopping, dining, company visits and stock trading - all in less than 48 hours.
The 33-year-old from Tokyo, who runs his own investment trading firm called Empire Bridge Worldwide, joins a growing band of Japanese investor tourists - investors who combine a holiday with buying stocks in Asia's world city.
The attraction is not only the shopping centres and the restaurants. Japanese investors are getting better returns from Hong Kong stocks when compared with the moribund performance of their own market.
Eighteen months ago, Horiguchi travelled to Hong Kong and set up a stock-trading account with  Sun Hung Kai Financial to trade Hong Kong-listed mainland companies.
'I lost money in my Japanese stock portfolio and even with the good ones, I can only earn about 5 per cent,' he said. 
'In contrast, mainland stocks listed in Hong Kong have brought me a return of about 20 per cent already.'
Horiguchi, like many other retail Japanese investors, shifted his investment from Japanese stocks to Hong Kong stocks when the financial crisis started to take its toll 18 months ago. He noted many European and United States investment funds also had sold their Japanese stocks and invested in mainland stocks in Hong Kong.
Referred by a friend to the Hong Kong brokerage firm, he flew here to open a trading account on his first shopping and investment trip. Since then, he had had several two or three-day trips to the city.
'It is a one-stop tour. It is very convenient as I can do my business, shopping, dining and trading stocks all in one trip,' Horiguchi said during his latest all-in-one two-day tour in Hong Kong.
According to stock exchange data, Japanese investment in Hong Kong increased 36.96 per cent from 2007 to 2008, the third-fastest growth after investors from the US and the rest of Asia.
Japanese investors represented about 3.4 per cent of all overseas investor trading in Hong Kong for the 12 months to September last year. That is lower than the US, Britain, Europe and the mainland but higher than Australia, the rest of Asia and Taiwan.
So how does someone like Horiguchi spend his two days in Hong Kong? Arriving on a morning flight, he first meets the clients of his Japanese investment company in Central for lunch.
He then goes shopping at the IFC mall. 'I like shopping in Hong Kong as it is much cheaper than in Japan,' he said.
At night, he dines at a restaurant in Causeway Bay, enjoying the spicy crab dishes. 'In Japan, we have some good places for dim sum. But we never find the same good crab and seafood as in Hong Kong. This is why I like coming here - for the good food,' he said.
In the morning of the second day, he interviews the management of two listed companies in Sheung Wan, with a view to making a personal investment. After having lunch in Central, he visits his broker at Sun Hung Kai. 
'I will meet my Hong Kong broker every time I come here as it is good to have a face-to-face discussion about investment strategies or any good initial public offerings,' he said.
In the evening, he does some last-minute shopping and dining before flying back to Japan on the midnight flight.
'Hong Kong and Japan are so close and it's only a three-hour flight,' he said.
Horiguchi said his Hong Kong trips were value for money, especially during the low season. He spends about US$1,500 for one trip, including return tickets between Hong Kong and Tokyo and a two-night stay at the Shangri-La or Marriott.
Hong Kong Securities Association chairman William Lee Yiu-wing said the poor performance of the Japanese stock market and the rising mainland economy had prompted Japanese investors to increase their investment in Hong Kong's H shares.
While Japan's Nikkei-225 Index has remained flat over the past 10 years, the Hang Seng Index increased more than threefold to the peak of more than 31,000 points before dropping to about 22,000. Lee said his firm, Taifook Securities, as well as Sun Hung Kai and KGI had set up Japanese desks or hired Japanese-speaking brokers to serve Japanese clients. 
Taifook, for example, has teamed up with a broker in Japan for cross-referrals.
'It is going to be a long-term trend for Japanese investors to invest in the Hong Kong market because the Japanese economy and stock market have been performing poorly for a long time,' he said.  
'Many Japanese investors are seeking investment for a higher return. As the US and European markets were hard hit by the global financial crisis over the past year, it is natural for them to invest in Hong Kong.'
While Horiguchi came as an individual traveller, some Japanese investors are  joining group investment tours arranged by Japanese or Hong Kong brokerages.
Weber Tang Siu-lap, director of north Asian sales at Sun Hung Kai, arranges investment tours of about 40 to 50 Japanese who visit firms on the mainland on an almost monthly basis.
Tang also accompanies executives of mainland companies listed in Hong Kong to visit Japan to meet investors there.
'Japanese investors like to meet management and visit the company to understand their operations and prospects before investing in them,' Tang said. 'Japanese tend not to do day trading. They are investing for the longer term. They like to buy stocks at a low price bit by bit to accumulate their portfolio.'
Tang, who studied and worked in the Japanese financial markets in the 1980s and 1990s, joined Sun Hung Kai in 2000 to establish the brokerage's Japanese desk.
'I translate the important Hong Kong daily news and gossip for our Japanese clients and e-mail them every day,' Tang said. 'My secretary is also Japanese.'
Tang said the Beijing Olympics last year put the spotlight on the mainland and encouraged Japanese investors to believe in the long-term prospects of the country. They now believe the mainland would repeat the same 20-year growth spurt Japan experienced after the Tokyo Olympics in 1964.
Some Japanese brokerages such as Nomura and Daiwa also have operations in Hong Kong but Horiguchi said he liked trading with local brokers like Sun Hung Kai as it had local connections and more research on the mainland firms.
'My broker at Sun Hung Kai can provide me with Japanese-language research reports and company news. Most importantly, it helps me to have company visits to meet management and discuss  their business plans,' he said. 'If I were to request to meet them as an individual Japanese investor, I don't think the company would like to speak to me.'
Before returning to Tokyo, Horiguchi has already decided to return soon. 'I will continue to come to Hong Kong once every two to three months for shopping, for the good food and to meet my broker,' he said. 
'I will gradually sell out my Japanese stock portfolio and increase my investment in Hong Kong.'



Japanese fly-in investors see big returns