Eurozone and Japan tipped as investor opportunities

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JAPAN and the eurozone could hold profitable investment opportunities, according to the co-founder of Seven Investment Management, Justin Urquhart Stewart.

Mr Urquhart Stewart’s recommendations come a year after Japan was hit by a tsunami while the euro zone has been overshadowed by the debt crisis.

Mr Urquhart Stewart said strong equity markets performances were a result of what was probably the highest profit margins in the United States for 60 years.

The global index grew by 11 per cent in the first quarter, with the DOW rising by 8.1 per cent and the S&P 500 up by 12 per cent.

“Margins (are) higher, wages (are) constrained and the interest costs at record lows, these are all positive signs,” he said.

But Mr Urquhart Stewart said the fact that corporations were hoarding money suggested they lacked confidence in sustaining demand.

“Maybe the less fashionable euro zone and Japan hold the opportunities for the next stage,” he said.

Mr Urquhart Stewart also said the internet and related technologies were making a strong impact on the UK economy.

According to the Boston Consulting Group (BCG) the internet economy contributed £121bn to the UK economy in 2010 – the equivalent of 8.3 per cent of GDP.

The BCG estimate this could rise to £225bn – or 12.4 per cent of GDP – by 2016.

This is considerably higher than projected figures for the US at 5.4 per cent, Germany at four per cent and France at 3.4 per cent.

Mr Urquhart Stewart also asked politicians not to claim the credit for the success of projects such as the East London Tech City.