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Big in Japan

OUR db index this month shows an interesting trend in Japan, where all breweries (with the exception of Ito En) have seen their share price increase. Asahi Breweries and Kirin Brewery Co have done particularly well and have witnessed an impressive surge in share price in the past quarter.

Both Asahi and Kirin, which rose by 17.5% and 16.8% respectively, have been actively increasing their distribution outside their Japanese home market, which has been depressed as a result of the economic downturn. The rival companies have been targeting the potentially lucrative Chinese market as part of their marketing strategy and have upped their distribution network across Europe. Asahi and Kirin, which both appointed new CEOs and COOs last quarter, have been experimenting with low-alcohol alternatives to beer, which is waning in popularity and losing ground to low-malt or no-malt beer.

The graph tracks the progress of the MSCI AC World Beverages, the MSCI World Beverages and MSCI Emerging Markets World Beverages indices. Emerging markets appear to be taking off compared to the more mature developed markets represented by the MSCI World Beverages index.  db May 2006


MSCI builds its indices from the industry level up by classifying securities by country of domicile; determining a Foreign Inclusion Factor (FIF) for each security; classifying securities according to the Global Industry Classification Standard (GICS®) into: Sectors (10), Industry Groups (24), Industries (62) and Sub-Industries (132); screening securities for size and liquidity; and finally, initiating security selection process to target 85% free float-adjusted market capitalisation for each industry group, within each country.

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