Business change in Japan will need more than pregnant pandas


At one point last Friday, the trader’s stock TotenkoTrade rose 29% after news broke that a giant panda at a famous restaurant in Tokyo’s Ueno district, a zoo across the road, could be pregnant.

Two days ago, the share price of Pigeon, Japan’s largest baby goods maker, skyrocketed following Beijing’s announcement that extremely nervous China would allow couples to have up. ‘to three children.

The day before, I tried to ask management a few questions. GloberideIs a Japanese company that provides the most advanced fishing equipment in the world. Its stocks are up 87% from a year ago due to the revival of the sport due to the pandemic. According to the company, all of these requests must be made by mail.

Each of these episodes fits into one of the many subplots associated with investing in Japanese stocks for decades. For example, news articles should always buy or sell ambiguous stocks. Alternatively, Japan offers China an advanced market strategy. Or even behind the most futuristic Japanese technology might lie the uncompromising handling of the power of frightening steam.

They’re great perennials, but the market still needs a spectacular story for real investment juice to flow to the Tokyo Stock Exchange. It has always been woven around the claim that the long-standing deadlock in Japanese business is being lifted and is poised to have a swift and transformative impact. Usually the problem from an investor’s perspective is management. There is either a team and its protected self-satisfaction, or a structural disagreement with the shareholders.

From 2013, reform of corporate governance, rebalancing of public pension funds, militant shareholding, elimination of participations, female name And all of the stringent stewardship requirements have served as the story behind the broker’s preferred stagnation. It was Japan, and each caused a huge influx of investment before succumbing to the frustration that nothing was really going so fast. Currently, brokers and investors are in mourning, but Japan suffers from a severe shortage of epic stories.

However, one of the peculiarities of the Tokyo market is that the 10 days at the end of June provides annual snapshots of Japanese companies, thanks to the habit of organized crime histories. It is during this period that the majority of companies hold shareholder meetings. The original goal was to protect them from corporate bad guys. Mizuho Securities said in a research note last week that the percentage of listed companies holding a shareholders meeting on the peak day of June 29 was only a record high of 27.3%.

Japan’s annual shareholders’ meeting season, as it has been for about six years, will provide quick and digestible proof of three things. The evidence is three weeks later, but not yet convincing. ..

Yes, more activists are standing on the Japanese shareholder register than ever before. About 40% of them are national and make increasingly rigorous proposals at annual meetings. According to CLSA’s John Siegrim, activists said 416 listed companies would invest 5.6 billion yen ($ 51 billion), 60% and 25% more than the same period last year, respectively.

Earlier this year, there was also a turning point where a large number of non-activists voted for activists. Opposed to the leadership of ToshibaEverything seems to be floating, but it has been for some time and progress is stalling. Despite what appears to be a change, half of Japanese stocks are still trading below their book value, not only the record redemption value as a percentage of stocks, but also the largest in developed markets. Have a report.

In this regard, Kathy Matsui, chief strategist at Goldman Sachs Japan last year, focused on ESG last week. Venture capital funds It focuses on domestic startups from the growth stage to the late stage. This is where she says there is a realistic prospect of instilling as the norm the kind of principles that listed companies have proven to resist so much.

Matsui’s best-known term is the term “womanomic,” which has been one of the most cohesive and epic change stories in Japan for many years and has failed to produce cohesive, concrete results. After spending thirty years trying to drive change at a Japanese publicly traded company, her efforts are focused on making it before the company goes public and, as she puts it, “it’s too late.” She says she will.

From pregnant panda booms and factory automation to fully solid-state batteries and hydrogen-powered vehicles, Japanese investment subplots will continue to be favorites for stock pickers. The epic story may need to be revisited.

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Business change in Japan will need more than pregnant pandas Business change in Japan will need more than pregnant pandas

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