Sojitz Corporation


Nissho Iwai Securities to start selling Millennium Nippon Equity Fund

Apr. 5, 2002

TOKYO(Apri 5, 2002)--Nissho Iwai Securities Co., Ltd (4-33, Roppongi 1-chome, Minatoku, Tokyo, Yuji Sakakura: President) has constructed a new publicly offered value fund, the Millennium Nippon Equity Fund (yen-denominated, Bermuda based contractual-type mutual fund, to be popularly known as the Nippon Revitalization Project). The fund plans to establish and maintain a friendly relationship with the companies in which it invests and hereby work to increase companies' values. The fund will be available from April 1st.

The Millennium Japanese Equity Fund will invest in companies whose securities have been undervalued in the recent sluggish stock market. One of the objectives of the fund is to review the value of companies in which it invests. Unlike most value funds, this fund will take a medium to long term perspective in making investments, and will aid the companies in their planning of financial strategies and investor relations activities. The fund will distinguish itself from competing funds by establishing and maintaining good relations with the management of the companies. This fund aims to bring out underlying values of companies in which it invests by giving support to their managements. In this way the fund will contribute to a revitalization of the Japanese economy.

CIGNA International Investment Advisors K.K. (2-2 Uchisaiwai-cho 1-chome, Chiyoda-ku, Tokyo, Toshiyuki Orimo: President,), a Japanese subsidiary of CIGNA Corporation which is a US financial service company, will manage the fund. The United Trend Investment Corporation (Tetsuo Ochi: CEO), a Hong Kong investment company, will be in charge of the selection of companies for investment, the planning of financial strategies and IR activities of the companies. As well as Nissho Iwai Securities, Tokai Tokyo Securities Co., Ltd. and Mito Securities Co., Ltd. will sell the fund.

Many companies have found themselves constantly struggling to escape from structural recession amidst the asset price deflation brought on by the collapse of the bubble economy and the intensification of international price competition. Yet the fact is that the stock of many companies with underlying strengths have been neglected and undervalued in the market. In these economic and market conditions the Millennium Japanese Equity Fund will target financially sound companies for investment. This will lead to the revitalization of these Japanese companies and their re-evaluation resulting in high-yield investment opportunities. We have developed Millennium Japanese Equity Fund to make such opportunities widely available to ordinary investors. We will exercise our shareholders' rights to support the management of these companies both in their financial strategies and their IR activities with the eventual aim being that their underlying values should be reflected in their share prices.

As most of the prospective companies are either listed on the TSE Second Section or traded on the over-the-counter market, institutional investors and stock indices arbitrage traders who use TOPIX (TSE 1st Section Stock Price Index) as a benchmark have seldom showed interests in their stocks. It is not unusual no analysts are assigned to investigate these companies.

Thus stock value and business results of such companies are hardly investigated at all, and as their IR are not carried out sufficiently, investors tend to view their business situations and managements with a lack of confidence and little interest. 

Generally speaking, investors tend to favour growth stocks and stocks with frequent price movements. Investments in companies with little price movement and low liquidity are few, despite the fact that the prices are undervalued from the point of view of PBR (the price per book value ratio). 

The Millennium Japanese Equity Fund shines a light on those companies which supported the economic growth of the 20th century and brings to the financial world the power to revolutionise the 21st century. 

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