Category: Uncategorized

One year has passed since the TSE requested a P/B increase at the end of March 2023 (“Request for action to achieve cost of capital and stock price conscious management”). Valuations are expected to increase as stock prices rise. In this analysis, I examined what trends were observed in the companies that increased their Tobin’s Q in the Metrical universe during the period from March 2023 to March 2024.

In the comparable Metrical universe of 1,750 companies from March 2023 to March 2024, the analysis is divided into 5 groups (>50% increase, >25% to <50% increase, >0% to <25% increase, no change, and decrease) for each item in terms of the percentage change in Tobin's Q. The median percent change in Tobin's Q during this period was 2.06%. The table below profiles the 1,750 companies in the Metrical universe, dividing them into five groups (>50% increase, >25% to <50% increase, >0% to <25% increase, no change, and decrease) by the percentage change in Tobin's Q over the one-year period from March 2023 to March 2024. We can see that companies whose Tobin's Q increased by more than 50% include those with high Tobin's Q, average ROE and ROA over the past three years, and foreign shareholding ratios. Although companies whose Tobin's Q rose by more than 50% in terms of market capitalization gave up the top spot to companies whose Tobin's Q rose by more than 25% but less than 50%, the relatively large market capitalization of these companies caused their Tobin's Q to rise. The companies whose Tobin's Q increased by more than 50% and by more than 25% but less than 50% continued to increase their ROE and ROA.

The Champion of Change Japan Award (CCJA) was established in 2017 to honor women leaders who tirelessly address the most pressing needs in their communities in Japan. Selected from 200 nominations annually and announced at an award ceremony in the fall, a grand champion received 1,000,000 yen and four awardees receive 250,000 yen each.

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Deadline (extended): Sunday, May 19 – Japan Time

I would like to examine which companies have experienced an increase in stock valuations over the past year, and have analyzed the characteristics of the 1,755 companies in the comparable Metrical universe whose Tobin’s Q increased between the end of December 2022 and the end of December 2023. The table below shows the median value of the change in Tobin’s Q for each of the six groups.

April’s stock market returned to values toward the end of the month, although the swing was large throughout the month.
The CG Top 20 stock market outperformed both the TOPIX and JPX400 in April by a wide margin.

Weakness in the U.S. stock market due to concerns about the risk of prolonged inflation and selling of semiconductor sector stocks caused Japanese stock prices to fall from mid-month, but the yen continued to weaken due to the Bank of Japan’s ongoing monetary easing, leading to a buying bounce toward the end of the month.

The TOPIX and JPX400 indexes gained -0.77% and -0.30%, respectively, in April, while the CG Top 20 index underperformed both indices by 1.30%.

The composites of CG Top 20 stocks has been replaced as of July 1.
Wacom (6727), K’s Holdings (8282), Eisai (4523), NSD (9757), and Trend Micro (4704) were new additions, while Ebara Corporation (6361), Orix (8591), United Arrows (7606), Tokyo Gas (9531) and Hoosiers Holdings (3284) were removed. Details of the component stocks are shown in the table below.

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By Helle Bank Jorgensen, CEO of Competent Boards

As we enter summer, an extraordinary shift is taking place in the realm of corporate sustainability. A momentous occasion occurred on Monday, June 26th, marking a significant milestone in our journey towards a more sustainable and resilient economy. The International Sustainability Standards Board (ISSB), an independent entity operating under the esteemed IFRS Foundation, has introduced its groundbreaking inaugural standards: the IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information, and IFRS S2: Climate-related Disclosures. These transformative standards, set to come into effect on January 1, 2024, are poised to revolutionize the complex landscape of sustainability reporting, rendering it more accessible for businesses and analysts alike.

This unveiling of the IFRS Sustainability Standards is akin to the birth of a new language—one that distills intricate concepts into actionable insights. Are we standing on the precipice of a game-changer? All signs point to a resounding yes.

Imagine a shared vocabulary that empowers stakeholders to discern, compare, and evaluate companies uniformly, presenting a transparent and cohesive view of the corporate sustainability panorama. This is precisely the promise encapsulated by these pioneering standards.

By Helle Bank Jorgensen, CEO of Competent Boards

The vast majority (95%) of business leaders and board directors believe that sustainability plays an important or very important role in shaping successful future boardrooms. That’s according to a Competent Boards white paper Why sustainability plays a key role in shaping future boardrooms that examined five key areas of focus for company board directors.

Two-thirds (66%) of poll respondents cited investor demand as the key driver of sustainable change in boardrooms. Other critical factors noted by respondents include: regulations; customer, employee and stakeholder demands; and board members’ fiduciary duty.