S&P Report: Cross-Held Shares In Japan Near New Phase Of Unwinding

Abstract: TOKYO (Standard&Poor’s) May 19, 2015–A growing focus on return on equity among major Japanese companies may drive them to further unwind cross-shareholdings in major lenders and other corporations, Standard&Poor’s Ratings Services said in a Japanese-language report published today. Also, the Tokyo Stock Exchange’s planned introduction of a corporate governance code in June 2015 is likely to further encourage companies to unwind cross-ownership. Moves to unwind cross-shareholdings spread among mostly financial institutions after the global financial crisis broke out in 2008 as the firms sought to curb risk. With corporations now rethinking their policies on cross-ownership, the move to unwind cross-shareholdings is about to enter a new phase. Cross-held shares have long played an important role in

Brief Excerpt:
…TOKYO (Standard & Poor’s) May 19, 2015–A growing focus on return on equity among major Japanese companies may drive them to further unwind cross-shareholdings in major lenders and other corporations, Standard & Poor’s Ratings Services said in a Japanese-language report published today. Also, the Tokyo Stock Exchange’s planned introduction of a corporate governance code in June 2015 is likely to further encourage companies to unwind cross-ownership. Moves to unwind cross-shareholdings spread among mostly financial institutions after the global financial crisis broke out in 2008 as the firms sought to curb risk. With corporations now rethinking their policies on cross-ownership, the move to unwind cross-shareholdings is about to enter a new phase. Cross-held shares have long played an important role in Japanese business practices as a means for corporations to maintain solid relationships with their lenders, which, in turn, smooths implementation of their longer-term business strategies….

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