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Stock prices climbed in the 1H of the month on risk-on rally buoyed by hitting historical high of US market, but concern about negative impact on global economy led by coronavirus infection put downward pressure on the stocks toward the month end. TOPIX and JPX400 market indices lost -0.11% and -0.09% respectively for the month. CG Top 20 stocks soft -0.07% but outperformed against the both indices for the same period.
We more often see the company’s posting about share repurchase lately. However, fewer companies retired the treasury shares in the past. How much companies cancel the shares? The following table shows that comparison of about the data of 1,800 Japanese companies between March 2018 and January 2020.
Stock prices edged slightly higher amid low trading volume from the previous month. TOPIX and JPX400 market indices gained 0.06% and 0.06% respectively for the month. CG Top 20 stocks kept solid up by 0.02% for the same period.
Public companies in Japan employ three types of legal governance structures for their boards. The three types of organizational structure are the Company with Corporate Auditors, the Company with an Audit Committee and the Company with Nomination Committee, etc. However, as shown in the pie chart below, very few companies use the Nomination Committee format. The number of companies shown below is based on Metrical’s research universe of 1,754 companies but the number of Companies with Nomination Committee, etc. would not be much different even if more smaller companies were included.
Some research organizations reported that Japanese companies have enhanced the corporate governance and others say the improvement wasn’t higher than expectations. Then, how fast has the corporate governance in Japan made progress for a few years? There would be different perspectives on which criteria each person focus. We would like to show one of the easiest ways that we can see the progress. It is the % of Independent Outside Directors (INEDs) of the board of directors (BOD) that shows very well how fast corporate governance in Japan has improved.
Please see the following 2 charts. The first pie chart shows the number of companies of >50% INEDs and =<50% INEDs in the BOD, respectively as of November 2019. The total number of companies was the companies METRICAL INC. covers as the core research universe (most of companies are listed TSE-1st Section and/or JPY10 billion market cap). A number of companies are included in the =<50% INEDs if other small companies than METRICAL's universe are included. In case, the % of the >50% INEDs in the pie chart will decrease significantly.
Stock prices closed higher amid risk-on mood from the previous month. TOPIX and JPX400 market indices gained 0.10% and 0.08% respectively for the month. CG Top 20 stocks rose modestly by 0.04% for the same period.
This month METRICAL shows how the disclosure about ex-CEO advisors has progressed from a year ago. As shown the table below, in October 2018, 829 companies on METRICAL’s research universe disclosed the number of ex-CEOs (ex- Representative Directors) who retained positions as “advisor” in the company after stepping down as CEO. Of these companies that voluntarily disclosed, 474 companies had ex-CEO advisors. A year later in October 2019, a total of 894 companies disclosed the number of ex-CEOs who retained such advisory positions seat in the company after stepping down from the top management position. Of these 894 companies, 503 companies had ex-CEO advisors in October 2019.
BDTI and METRICAL are continuing to collaborate on finding “linkages between CG practice and value creation.” METRICAL has recently updated the results of our analysis at the end of October 2019 for about 1,800 listed companies representing a market capitalization of more than 10 billion yen. In this update, we see that the number of […]
Stock prices closed higher amid low trading volume. TOPIX and JPX400 market indices rose 0.26% and 0.27% respectively from the end of the previous month. CG Top 20 stocks slightly underperformed against the both indices, closed up by 0.16% in September.
While overseas investors’ ownership decreased a year ago, activist investors are now likely to focus on Japanese companies. Corporate governance in Japan has improved since the Corporate Governance Code was introduced in June of 2015, but progress is much slower than foreign investors hoped. At this time, we analyze the relationship between % ownership held by overseas investors and key governance criteria. The following table shows the result of our regression analysis of the 13 governance factors that METRICAL uses as criteria and two performance measures, ROE and ROA. Of the 15 factors, 14 factors are significantly correlated with level of ownership by overseas investors.
