This informal coalition that seems to be coming into being between the GPIF, CalSTRS, and CalPERS would be a big step ahead in terms of discussions to increase the effectiveness of engagement by not only these organizations, but also their fund managers and other market players. Kudos to all three institutions, and also Mr. Mizuno, for moving in this direction.
Category: Investment
Business Financial Post ”Japan discovers ‘good’ governance, U.S. style”
”Not so long ago, back when they were eating the lunch of American corporations, Japan’s Toyotas, Hitachis, Sonys, Canons and Hondas were governed in the worst possible way — at least according to the canons of American governance. Their boards were made up almost exclusively of corporate insiders, with no independent directors and no diversity. […]
Bloomberg: ”The Tokyo Whale Is Quietly Buying Up Huge Stakes in Japan Inc.”
“…. Still, the longer the BOJ’s buying persists, the bigger the risk that market prices will detach from fundamentals. Assuming Goldman Sachs’s prediction for more stimulus proves correct, the central bank could end up owning a quarter of Mitsumi Electric Co., a supplier to Apple Inc., and 21 percent of Fast Retailing by the end of 2017, estimates compiled by Bloomberg show.
”In Shocking Finding, The Bank Of Japan Is Now A Top 10 Holder In 90% Of Japanese Stocks”
”The latest shocking example of just how intertwined central banks have become in not only Treasury and corporate bond markets and their respective “valuations”, but also in stocks, comes courtesy of the Bank of Japan which days ahead of an announcement which may see it double its ETF purchases from the current JPY3.3 trillion to JPY7 trillion or more (if Goldman is correct) has just been revealed to be a top 10 holder in about 90% of all Japanese stocks!
Goldman Sachs Asset Mgt. : The Upside of Japan’s Corporate Reforms
JAPAN’S VALUATIONS HAVE FALLEN DESPITE STRONG EARNINGS GROWTH
Source: Factset, IBES, GS GIR. Data are consensus for calendar years January 1, 2013 to March 22, 2016. Past performance does not guarantee future results, which may vary.
Goldman Sachs Asset Management (GSAM), one of the world’s leading investment managers discusses its constructive view on Japanese equities with Mr. Ichiro Kosuge, the Fundamental Equity Portfolio Manager. Mr. Kosuge highlights the importance of corporate sector reforms to the market’s outlook.
”What is your overall view on Japanese equities?
Ichiro Kosuge: We are constructive on Japanese equities. In addition to the potential for macroeconomic improvement, we believe corporate governance reforms, high cash holdings and attractive valuations could drive equities higher.
Bloomberg: ”Asia set to turn tables on lagging ESG transparency”
Asian exchanges push for greater ESG disclosure to woo investors
”Asian stock exchanges are seeking to improve the region’s historically weak record of environmental, social and governance (ESG) disclosures.
KKR & Co. LP: ”Strengthened Corporate Governance Will Help Drive Japan’s Economy”
”Japan, the question of value creation has become increasingly important as corporate governance evolves and Japanese industry restructures in the era of Abenomics, Prime Minister Shinzo Abe’s plan to jolt the world’s third-largest economy.
ACGA’s Feedback to FSA on Japan’s Governance Code: Training by Specialist Providers Important
”………Experience shows that the implementation and evolution of “comply and explain” can take a long time to develop, but there are opportunities to accelerate this transition. The Follow-up Council may wish to consider how to guide and assist Japanese listed companies and domestic institutional investors to understand and implement good disclosure. For example, the Council could advise the FSA to do the following:
Bloomberg : ”Japan Inc. Fights Back on Governance Overhaul as Waste of Time”
”Many Japanese companies aren’t happy about the biggest overhaul of corporate governance in decades — and they’ve been letting the world’s biggest pension fund know.
GPIF: ”Summary Report of Listed Companies’ Survey about Institutional Investors’ Stewardship Activities”
Ⅰ. Purpose of the Survey
The Government Pension Investment Fund, Japan (GPIF) conducted our first survey to JPX Nikkei Index 400 companies to evaluate stewardship activities of our external asset managers and to grasp real situation of constructive dialogues. As we stated in “Summary Report of GPIF’s Stewardship Activities in 2015” dated of 29th January 2016, it is our intention to raise the standard of dialogues between institutional investors and Japanese companies.