Bloomberg (January 12)
“Since Kuroda took office five years ago, bank stocks have underperformed the broader market by more than 50 percentage points,” but there are signs that Japanese banks will soon lose their “cheapest in the world” status. Despite a 5.7% average ROE, large Japanese financial institutions trade at just 0.69 of book. If, as widely expected, the BoJ relaxes its yield curve control, these large financial institutions would receive a welcome boost.
Tags: BOJ, Japanese banks, Kuroda, ROE, Stocks, Underperformed, Yield curve
Financial Times (April 10)
“Japan’s progress on stewardship and corporate governance reform has looked wobbly of late. The ROE gains made in the first 30 months of Abenomics (up from an average of 5.8 per cent in December 2012 to a mid-2015 peak of 8.8 per cent) have been in steady reversal since then.”
Tags: Abenomics, Corporate governance, Japan, Progress, ROE, Stewardship, Wobbly
The Economist (March 26)
There is “a corrosive lack of competition” among big firms in the U.S. “The naughty secret of American firms is that life at home is much easier: their returns on equity are 40% higher in the United States than they are abroad. Aggregate domestic profits are at near-record levels relative to GDP. America is meant to be a temple of free enterprise. It isn’t.”
Tags: Competition, Corrosive, Domestic profits, Free enterprise, GDP, ROE, U.S.
Financial Times (June 28)
TSE-listed companies are now disclosing the salaries of individuals earning more than 100 million yen. This is a welcome step. Despite the uproar, it’s natural that heads of global groups, such as Nissan or Sony, receive greater pay than executives focusing on the domestic market. In fact, the Financial Times hopes even “greater pay differentials” will result. Managers that generate cash, rather than just hording it, deserve higher salaries. During 2010, Japanese companies are expected to generate less than half the return on equity of other stocks in the developed world. Higher salaries could “be both useful and justified” in raising corporate performance.
Tags: Executive pay, ROE, TSE
