Securities Monitor (January 18, 2012)
“Chi-X Japan numbers have shot up significantly since the beginning of the year.” In the fourth quarter, Chi-X Japan increased trades by 50.4%, though it still handles less than 3% of Japan’s trading, most of which remains on the Tokyo Stock Exchange (TSE) and the Osaka Securities Exchange (OSE). Chi-X is also gaining traction in Australia and Canada, where it now accounts for roughly 11% of trades. In combination with the Singapore Exchange (SQX), Chi-X also operates a Pan Asian dark pool, Chi-East, which “supports trading of 3,264 securities including all Hong Kong main-board listed shares.”
Businessweek (January 6, 2012)
Japan was the first country in the Asia Pacific region to allow proprietary platforms to compete with traditional exchanges and these platforms have had a stellar year. “Volume on SBI Japannext and Chi-X Japan since the March 11 earthquake has been triple the level seen in the year leading up to the natural disaster.” In contrast, trading on the Tokyo Stock Exchange declined by roughly 19%. Altogether the proprietary markets accounted for 7.8% “of the volume in Topix Index stocks last year, up from 6 percent in 2010.”
Tags: Asia Pacific, Chi-X, Japan, SBI Japannext, Trading platforms, TSE
Reuters (April 25)
Profitability is expected to suffer at firms listed on the Tokyo Stock Exchange’s first section. According to Barclays Capital, average net profit “will fall 12 percent this financial year, with the slide led by export-related industries such as auto and electronics firms.” Markets may already have factored this into share prices. There may even be some upside. “Some investors are encouraged by the speed at which power generation capacity has recovered since the quake, and initial plans to force large users to cut back by a quarter may be eased.” In addition, there are hopes that later in the year supply chains will stabilize and consumption will benefit from rebuilding and relief efforts.Profitability is expected to suffer at firms listed on the Tokyo Stock Exchange’s first section. According to Barclays Capital, average net profit “will fall 12 percent this financial year, with the slide led by export-related industries such as auto and electronics firms.” Markets may already have factored this into share prices. There may even be some upside. “Some investors are encouraged by the speed at which power generation capacity has recovered since the quake, and initial plans to force large users to cut back by a quarter may be eased.” In addition, there are hopes that later in the year supply chains will stabilize and consumption will benefit from rebuilding and relief efforts.
Tags: Electricity, Forecast, Japan, Profit, Share prices, Supply chains, TSE
Reuters (April 6)Reuters (April 6)
Amid a dearth of disclosure, overseas and domestic investors are finding it difficult to assess investments in Japan. In response to the quake, the TSE is allowing firms an extra three months to announce earnings. “Underscoring the uncertainty, some 460 firms listed on the Tokyo Stock Exchange have yet to tell the bourse when they plan to announce earnings for the year ended on March 31, more than 5 times the average.” Moreover, fewer firms are expected to provide “a forecast for the year ahead, depriving investors of a key guide on which they would normally rely to make trading decisions.”
A “cup of sake could save the nation.” The Financial Times disagrees with Tokyo Governor Shintaro Ishihara’s efforts to discourage traditional hanami cherry blossom viewing parties out of respect for those still suffering from disaster. The Governor’s entreaties could make a bad situation worse, as restraint worsens a reeling economy. “Mr Ishihara risks deepening the post-disaster slump by simultaneously seeking to stop Tokyo residents from celebrating the arrival of cherry blossoms with their traditional hanami flower-viewing parties.”
Tags: Earnings, Forecast, Japan Investors, Quake, TSE
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
