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At one point last Friday, the operator’s shares Totenko, A famous restaurant in Tokyo’s Ueno district, was trading 29 percent higher after learning that a giant panda that lived in a zoo across the road could be pregnant.
Two days earlier, shares of Japan’s largest children’s product stock rose sharply when it announced from Beijing that it was demographically nervous that China would allow couples to have three children.
A day before that, I tried to ask the management some questions Globeride, a Japanese company behind some technological fishing equipment in the world. Its stock has increased by 87% since last year as a result of the recovery of the sport driven by the pandemic. All such inquiries, the company said, should be mailed.
Each of these passages fits into the many subplots that have been attached to Japanese capital investment for decades. For example, there is always a dark stock to buy or sell in a news story. Or Japan offers developed plays on the market in China. Or, behind the seemingly futuristic Japanese technology, the management of rigorous steam-powered intransigence can be hidden.
They are durable, but for real investment juices to pass through the Tokyo Stock Exchange, the market always demands a great narrative. It has always been woven around the assertion that corporate logjam is about to be unraveled in corporate Japan, with a rapid transformative impact. Typically, from an investor’s perspective, the problem is with management and sponsored satisfaction or structural alignment with shareholders.
Since 2013, corporate governance reform, the rebalancing of government pension funds, shareholder activism, the dissolution of cross-participation, feminism and sharpening care requirements have been a favorite of brokers ’logjam-clearing stories. In the adaptations and beginnings, each has resulted in large investment inflows, due to Japan and the fact that nothing moves so quickly before it reaches frustration. At the moment, brokers and investors are complaining that there is a huge deficit of big narratives in Japan.
However, it is an unusual feature in the Tokyo market that, thanks to the curiosity of the history of organized crime, the 10-day deadline at the end of June provides an annual picture of corporate Japan. During this time the AGM makes up the vast majority of companies. Originally, the goal was to protect it from corporate racketeering. In a research note last week, Mizuho Securities said the percentage of listed companies that had AGMs on the high of June 29 was a mere 27.3 percent.
As has been the case for about six years, the Japanese AGM season will quickly digest three things evidence: how empowered activists feel, how big organizations support them, and how they both feel threatened by management. The evidence, three weeks old, is not yet credible.
Yes, there are more entrepreneurs camped in the Japanese shareholder registers than ever before. About 40% of them are domestic and make increasingly demanding proposals in AGMs. Among them, CLSA’s John Seagrim estimates that entrepreneurs have recorded 5. 5.6 trillion ($ 51 billion) in 416 listed investment companies, 60% and 25% higher than last year, respectively.
Also, there was something at the beginning of the year when big non-activists voted with activists Against the management of Toshiba. Everything looks good, but it has done so for a while and the progress is muddy. Despite the changes, half of Japan’s shares are still traded below book value and do not have a record cash value as a proportion of equity, but have the highest such ratio in developed markets.
In this context, it was revealed last week that Kathy Matsui, who last year was appointed Japan’s chief strategist at Goldman Sachs, on the subject of ESG venture capital fund focused on early home start-up businesses. In his view, it is an area where there is a real opportunity for standardized companies to incorporate standards that have been so resilient.
Matsui’s most popular coin was the term “womenomics,” which for many years continued to be one of the greatest narratives of Japanese change, except for consistent and tangible results. After three decades of trying to promote change in Japanese-listed corporations, he said his efforts will be focused on companies before they go, and he says it will be “too late” to focus on that.
Japanese investment subplots, from pregnant pandas to boomers to factory automation, solid-state batteries and hydrogen vehicles will be favorites of the deposits. Great narratives will have to think again.
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