The blistering rally in Japanese stocks has unfairly benefited companies that are flouting the bourse’s campaign to boost valuations, creating a major short opportunity, according to a top-performing hedge fund manager.
Reform efforts have been touted as one reason for Japan’s world-beating gains this year, but even some "bad governance” companies have been riding the wave, according to Zuhair Khan, a fund manager at Union Bancaire Privee who has been following the market for more than two decades.
"They’ve just gone up with everything, and people will start to realize these companies are way overvalued for how they’re going to behave,” Khan said in an interview. "They really want nothing to do with this corporate governance reform.”
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