Japan Hunkers Down to Avoid the Virus, Boosting ‘Shut-In’ Stocks
As More Japanese Work From Home, These Stocks May Avoid the Rout
(Bloomberg) -- As the coronavirus spreads in clusters around Japan, a country where workplace attendance has been seen as essential is slowly pivoting to accept working from home. That’s sending an array of stocks, catering to remote working, food delivery and e-commerce, to record highs.
A lone infected employee at Dentsu Group’s headquarters in Tokyo’s Shiodome has prompted the advertising giant to send 5,000 workers home, and led cosmetics major Shiseido Co., which occupies a neighboring building, to recommend 8,000 of its workers stay out of the office. On Wednesday, a person infected with the virus was confirmed to have been at the Shin Maru Building at the heart of the nation’s financial district.
The spread has propelled stockpickers and retail investors to target a hitherto-niche selection of equities, as Japan Prime Minister Shinzo Abe called on companies to allow employees to work from home. Among the prominent beneficiaries was Tokyo First Section-listed V-Cube Inc., which makes video conferencing software and saw its share price almost double in a week.
On Wednesday, the latest slate of winners included diminutive FonFun Corp., a provider of remote working services which jumped 24%; e-commerce logistics providers Phyz Holdings, which added 14%; and remote work crowdsourcer Real World Co., which surged the most since 2014. All three advanced by their daily limit.
Japan is belatedly starting to respond to the risk of the virus, with public events including the Tokyo Marathon being canceled on concerns over the coronavirus, the country’s top-flight soccer league putting games on hold for weeks and the Tokyo government calling off indoor events.
Concerts by some of the country’s biggest pop acts have been scrapped after one infected person was found to attend a gig, and the specter of the Tokyo Olympics becoming a victim of the outbreak is starting to be raised. Tokyo is considering bringing forward the start of spring holidays for metropolitan government-run high schools, and the national government has approved shutting day-care centers in areas with multiple cases, local media reported.
As a result, more people may choose to stay cooped up at home, working remotely or avoiding outdoor leisure activities entirely, Mizuho Securities Co. chief equities strategist Masatoshi Kikuchi wrote in a Feb. 18 note. That could provide a boost to services such as food delivery operator Demae-can Co. Videogame shares could also climb as more people stay indoors, he wrote.
Tomoaki Kawasaki, senior analyst at Iwaicosmo Securities Co., also sees stocks of payment services like GMO Payment Gateway Inc. rising if demand for e-commerce increases as people opt to shop from home.
“If more companies decide to adopt remote work, companies may provide PCs to employees, which could potentially move shares of PC-related stocks like Fujitsu Ltd.,” he added.
Other potential beneficiaries include the following:
- Remote working: collaborative software maker Cybozu Inc,; virtual desktop infrastructure maker Ascentech KK; remote e-learning operator IStudy Co.
- Food delivery: food delivery operator Demae-Can; pizza ingredient producer JC Comsa Corp.; and Shidax Corp., which counts food services for medical facilities among its operations
- Entertainment and e-commerce: videogame makers Square Enix Holdings and Nintendo Co.; manga app operator Amazia Inc.; online mall operator and Zozo and Askul owner Z Holdings Corp.
--With assistance from Ayaka Maki and Cormac Mullen.
To contact the reporters on this story: Shoko Oda in Tokyo at soda13@bloomberg.net;Komaki Ito in Tokyo at kito@bloomberg.net
To contact the editors responsible for this story: Lianting Tu at ltu4@bloomberg.net, Gearoid Reidy
©2020 Bloomberg L.P.