Change is afoot at Japan Inc

Shares in Fanuc, a Japanese industrial robotics firm, have soared after it announced a more shareholder friendly policy.

Shares in Fanuc, a Japanese industrial robotics firm, have jumped sharply to new record highs in recent days. This follows an announcement that the notoriously secretive and investor-unfriendly company, Japan's tenth-biggest by market value, is to establish a shareholder-relations department and start meeting stockholders. It is also considering returning cash to shareholders by raising its dividend and buying back stock.

These concessions to shareholderscome after pressure from billionaire American investor Daniel Loeb, whose hedge fund Third Point owns a stakein Fanuc. Loeb has been agitating forthe firm to make its money work harder for shareholders. His breakthrough is a rare victory for activist investors in Japan.

What the commentators said

The good news for Loeb, noted Eric Pfanner in The Wall Street Journal, is that he is pushing at an open door. Previous attempts to extract more value from Japan's notoriously shareholder-hostile companies went nowhere, but revamping corporate governance is now a flagship government policy.

There is a new stewardship code for institutional investors, while the government pension fund, which is increasing its equity investments, will concentrate on a new index, the JPX-400, which was set up to highlight firms with better-than-average governance.

Not only should investing in stocks become more appealing, but the money from corporate cash piles should flow into the economy. About time, concluded William Pesek on bloombergview.com. Japan Inc. is finally making "important progress".

Recommended

What China’s new red dawn means for Hong Kong
Chinese economy

What China’s new red dawn means for Hong Kong

China has once again moved to tighten its control over the former British territory and global financial centre. What will remain of the old Hong Kong…
10 Apr 2021
How to invest in Vietnam – an emerging market that shone in a difficult year
Emerging markets

How to invest in Vietnam – an emerging market that shone in a difficult year

Vietnam has been one of Asia’s most promising markets for a long time. Now it is shaking off the global coronavirus crisis and looking better than eve…
12 Mar 2021
Why investors should beware of India’s surging stockmarket
Emerging markets

Why investors should beware of India’s surging stockmarket

The BSE Sensex benchmark index has soared by 90% since March, largely driven by foreign investors. But India's bull market is very vulnerable.
15 Jan 2021
How Asia's RCEP deal has brought the return of free trade
Global Economy

How Asia's RCEP deal has brought the return of free trade

While Britain and the EU struggle to come to terms, 15 Asia-Pacific countries quietly signed the biggest free-trade deal in history. That’s a welcome …
25 Dec 2020

Most Popular

The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021
What does the Coinbase listing mean for bitcoin and other cryptocurrencies?
Bitcoin

What does the Coinbase listing mean for bitcoin and other cryptocurrencies?

As the bitcoin price hit new highs, the world's biggest cryptocurrency exchange, Coinbase, listed on the stockmarket. John Stepek looks at what that m…
15 Apr 2021
Lab-grown meat: the new agricultural revolution
Soft commodities

Lab-grown meat: the new agricultural revolution

Vegan alternatives are taking off, but the future of food technology lies in lab-grown meat – cultivating steaks and burgers from animal cells, says A…
16 Apr 2021