Markets seem to be willing to go higher as the year starts but for different reasons than in 2020 and on different sectors. The debate is raging again between growth and value, between technology and cyclicals. Big technology names are looking like they have priced a lot of good news. Apple or Microsoft failed to react positively to their very strong quarterly numbers and outlook. The leadership they had on markets seems to be waning.

Semiconductors were a hot topic as an unexpected shortage of semiconductors hit major car makers forcing them to stop manufacturing. This created strong inflows into semiconductors and semiconductor producing equipment. Many stocks in that space offer a very good equilibrium between growth and valuation. Upward revised capex by industry leaders such as TSMC, Samsung or Hynix indicates that the current bounce is not a straw fire. We rather see it as an early sign of broader market appetite for high quality manufacturing.

A lot of high-quality industries are to be found at very reasonable valuation in Northern Asia, mostly in Japan but also in South Korea, Taiwan and increasingly China. This is not only true for semiconductors but also batteries, new materials, robots, or bio drugs. 

In January, a new position in SMIC a leading Chinese foundry has been built. Biotechnology is a relatively new field with new strategic positions being added in Wuxi Biologics and Fujifilm. With companies such as Nidec, Daikin, Fanuc or Panasonic, just to quote a few, Japan has still a lot to offer in these areas.