Corporate governance/changes in the corporate landscape/ shareholder activism are three factors, now well established, that should contribute to a fundamental change in market dynamics.
The Japanese market has outperformed the global market in local currency terms over the past 2 years (see chart below).
The fund manager of our japanese equity fund Taiko Japan, Rupert Kimber, recently came back from a trip to Japan. Here are his notes.
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The restructuring of Japanese companies, which began a decade ago with the aim of improving profitability, cash flow and returns to shareholders, accelerated last year under the impetus of a wave of management buy-outs, hostile takeovers and interventions by activist shareholders. In 2023, for example, activist shareholders forced companies to make payments to their shareholders on sixty occasions.
Nach einigen früheren Fehlstarts scheint der japanische Markt – von den Anlegern mehr als 30 Jahre lang vergessen – endlich bereit für einen Neuanfang. Die japanische Wirtschaft hat sich stark verändert, auch wenn der Markt dies noch nicht vollständig wahrnimmt. Außerdem hat die Tokioter Börse eine Reihe ernsthafter Initiativen ergriffen, um die Unternehmen zu ermutigen, den Shareholder Value zu maximieren. In diesem Webinar, das am 13. Juli 2023 stattfand, gibt Rupert Kimber, Fondsmanager des Quaero Capital Funds (Lux) – Taiko Japan, einen Ausblick auf die sich verändernde Landschaft des japanischen Marktes und die Chancen, in die er investiert.
In diesem Webinar vom 6. Juli 2023 spricht Nancy Hirshberg, Agrar- und Umweltexpertin und Mitglied des Expertengremiums der Fonds Accessible Clean Energy und Net Zero Emission, über die Dekarbonisierung der Lebensmittelindustrie. Martina Turner und Olivier Ken, Manager des Quaero Capital Funds (Lux) – Accessible Clean Energy und des Quaero Capital Funds (Lux) – Net Zero Emission, erklären, wie sie sich bei ihren Investitionsentscheidungen in diesem Sektor auf Nancys Expertise verlassen.
Japan has been the bete noire of many asset allocators’ portfolios for most of my 34 years managing money there, and investors continue to be underweighted from an asset allocation perspective. The throwaway line of ‘it is cheap, but the value cannot be realised’ is no longer true. Change is happening and as Mr Kikuchi the Mizuho Strategist noted, there were 5 activist proposals in 2015 and this had risen to 60 in 2022. The Tokyo Stock Exchange (TSE) clarified what was expected to be considered by Japanese companies, instead of insisting what should be published. Cost of capital, return on invested capital (ROIC), return on equity (ROE), and other appropriate measures came out during March. All these measures are designed to make investing in Japan more attractive.
For almost 35 years, Japan has been the victim of the collapse of one of the most gigantic double bubbles in history (real estate and equities), which explains the structural underperformance of the Japanese market for 3 decades (see chart below). The Japanese market now accounts for just over 6% of world stock market capitalisation, compared with over 50% at the peak of the great bubble at the end of 1989.
The situation in Japan illustrates the extent to which a country’s path towards net zero is subject to constraints.