Japan sees Increase in Foreign Investors
Foreign investors are playing a larger role in Japanese company boardrooms.
For the 3rd year in a row, foreign share of the Japan’s stock market has hit a record high.
There are two reasons –
1. Japanese companies continue to make money
2. Japanese companies abide by strong economic fundamentals
As a result the gaijins (foreigners) are pressing for the Japanese companies to play by more western business practices…such as:
1. Higher dividend payments
2. Lower cash reserves by buying back shares of investors
3. Greater emphasis on profit and return on equity rather than market share
4. More transparency in investor relations
Last year, foreigners held 26.7% of Japanese shares, up 3% from the year before.
This increase in foreign buying is credited with the rally in the Japan stock market.
It remains to be seen if east and west can get along in the Japanese boardrooms. When the west wants something they will try to acquire it – even it’s not for sale. The Japanese generally don’t do the hostile M & A thing, for example.
Nevertheless, there is more intersest in Japan from westerners. Its because Japan’s economy is back, I think.
What do you think?
