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POSTS BY MASASHI MURATA
  • Investment Opportunity in Cash Rich Japanese Equity 3: Stronger Support in Japan for Activist Funds Demanding Increase in Shareholder Returns

    Masashi Murata, CFA    Kei Yamaguchi, MM Capital Investments
    03 Sep 2017
    784
    24

    Japanese regional banks have been suffering from the severe business environment and financial conditions since the 2008 Lehman Crisis. This situation has worsened since the Bank of Japan introduced negative interest rates in 2016.

    On the other hand, Japanese corporations still have not paid sufficient dividends to its shareholders. The dividend payout relative to net profit (Payout Ratio) and capital (DOE) are half or less of leading global markets.

    Shareholder proposals for an increased dividend payout of Japanese corporations are more supportive by large investors including banks in Japan. Another tail wind is the Japanese “Stewardship Code” which seeks for stronger corporate governance and deeper dialogues between corporations and shareholders
  • Investment Opportunity in Cash Rich Japanese Equity: A Closer Look at Corporations in the Land of the Rising Sun

    Masashi Murata, CFA    Masashi Murata, CFA, Kei Yamaguchi
    24 Jul 2017
    806
    19

    - Japanese corporations have been steadily increasing its profitability since the bubble economy in the 1980s. The profit margins are at record high and sales are maintaining an upward trend.
     
    - Notwithstanding the record high profitability, Japanese corporations still have not paid sufficient dividends to its shareholders. The dividend payout relative to net profit (Payout Ratio) and capital (DOE) are half or less of leading global markets.
     
    - There are many cash rich corporations in Japan which could, for example, payout dividends at the rate of global market average for about 10 years and still have a remaining cash ratio equivalent to that of an average Japanese corporation.
     
    - More dividend payout would result in higher share price. There are many undervalued cash rich corporations in Japan still not exposed to global investors.
  • Investment Opportunity in Cash Rich Japanese Equity: Rising Opportunities in the Land of the Rising Sun

    Masashi Murata, CFA    Kei Yamaguchi
    13 Jul 2017
    217
    29

    As a result of the “Abenomics” reform, listed Japanese corporations are steadily
    accumulating wealth in the form of cash and other liquid assets since 2013.

    The share price of these cash rich corporations remains undervalued. Nearly half
    of the listed companies in Japan have a PBR of less than 1.0. These undervalued
    corporations have a large potential for a hike in share price.

    In June 2017, the PBR of JASDAQ Japan listed Solekia (9867) soared from 0.3 to
    1.2 in less than six months. The new “Stewardship Code” introduced in 2014 forces
    stronger corporate governance in Japan. Since 2014, there have been significantly
    stronger shareholder dialogues thus expanding investment opportunities.