Category

ESG

Aug 05
0

Daily Brief ESG: Share Buybacks Exceed BOJ’s ETF Purchases and more

By | Daily Briefs, ESG

In today’s briefing:

  • Share Buybacks Exceed BOJ’s ETF Purchases, but BOJ’s Presence Is Significant in Another Aspect

Share Buybacks Exceed BOJ’s ETF Purchases, but BOJ’s Presence Is Significant in Another Aspect

By Aki Matsumoto

  • Of course, When the BOJ’s ETF purchases were active, there were concerns about their impact on stock price formation, but now the impact is much smaller.
  • However, the BOJ has a presence in listed companies as a silent major shareholder, it is highly questionable whether its voting rights are being properly exercised.
  • While the silent major shareholder exists, overseas investors have played major role in enhancing corporate governance. In addition to cross-shareholding structures, they also have to contend with the silent shareholder.

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Aug 03
0

Daily Brief ESG: Isn’t Performance of Japanese Stocks and more

By | Daily Briefs, ESG

In today’s briefing:

  • Isn’t Performance of Japanese Stocks, After All, the Reason for Declining % Individual Shareholders?

Isn’t Performance of Japanese Stocks, After All, the Reason for Declining % Individual Shareholders?

By Aki Matsumoto

  • The Nikkei suggests that the aging population may be the cause. However, performance is assumed to be factor, even when young people open accounts, they investment mostly in foreign stocks.
  • In the end, what matters most is that the listed company presents growth expectations. This is what leads to stock performance.
  • While tax and other support are one of the factors that motivate individuals to invest, if companies aren’t attractive for investment, their investments are likely to be in foreign stocks.

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Aug 01
0

Daily Brief ESG: SGX/NYSE Collaboration Agreement: Right Partners and more

By | Daily Briefs, ESG

In today’s briefing:

  • SGX/NYSE Collaboration Agreement: Right Partners, Right Place, Right Products
  • It Is Very Important to Review ESG Investing Before the Risks Become Evident
  • ICICI Bank, KMB Q1 Conferences: Media and Analysts’ Silence Is Not Golden for Stakeholders

SGX/NYSE Collaboration Agreement: Right Partners, Right Place, Right Products

By Kyle Rudden

  • Last week, SGX and the New York Stock Exchange announced a collaboration focusing on dual listings and new products (primarily ETFs)… and all with an overarching ESG imperative.
  • Typically, these kinds of announcements are met with a healthy dash of skepticism by investors but the SGX/NYSE agreement is a clear exception, deserving atypical early-stage optimism.
  • Complementary skill sets (Right Partners), once-in-lifetime market opportunities (Right Place), and leveraging existing cabilities to meet current ESG investing demand (Right Products).

It Is Very Important to Review ESG Investing Before the Risks Become Evident

By Aki Matsumoto

  • The reason for the limited increase in GPIF’s ESG investments must be thought of separately in terms of GPIF-specific factors and the overall trend in ESG investing.
  • Because investors consider which combination of managers in their asset allocation will work best for the overall portfolio, there are factors that cannot be determined by individual ESG investing alone.
  • ESG investing has been expanding, but with so many ESG indices and vendors in disarray, some problems are pointed out. It’s important to review the effectiveness of the ESG indices.

ICICI Bank, KMB Q1 Conferences: Media and Analysts’ Silence Is Not Golden for Stakeholders

By Hemindra Hazari

  • ICICI Bank Ltd (ICICIBC IN) & Kotak Mahindra Bank (KMB IN) actively covered by a large number of analysts
  • Significant issues of regulatory penalties on Kotak Bank subsidiary & major theft in a currency chest of ICICI Bank. No clarification from both banks
  • Instead of demanding explanations from the banks during the 1Q concalls, media and analysts chose to remain silent

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Jul 30
0

Daily Brief ESG: When Will Kyoto Bank’s Policy Change? and more

By | Daily Briefs, ESG

In today’s briefing:

  • When Will Kyoto Bank’s Policy Change?

When Will Kyoto Bank’s Policy Change?

By Aki Matsumoto

  • The current shareholder structure of Kyoto Bank, where domestic financial institutions are the top shareholders and still continue to hold cross-shareholdings, will make it difficult to pass the shareholder proposal.
  • In environment of continued sluggish bank earnings, the dividend income from policy shareholdings and the huge unrealized gains on stocks are valuable assets for weathering this difficult business environment.
  • Kyoto Bank’s policy will change when the interest rate environment changes and earnings are expected to improve, or when the shareholder structure changes due to a significant reduction in cross-shareholdings.

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Jul 29
0

Daily Brief ESG: Analyzing 51-Day Strike of Daewoo Shipbuilding & Marine Engineering Co.(DSME) From ESG Perspective and more

By | Daily Briefs, ESG

In today’s briefing:

  • Analyzing 51-Day Strike of Daewoo Shipbuilding & Marine Engineering Co.(DSME) From ESG Perspective

Analyzing 51-Day Strike of Daewoo Shipbuilding & Marine Engineering Co.(DSME) From ESG Perspective

By Emily Jiwon Kim

  • Subcontract workers of DSME went on strike demanding a 30 percent wage increase from the beginning of June which lasted for 51 days. 
  • The strike was captured as 2 ESG risk issues: ‘Working conditions’ and ‘Supply chain’ risks among 17 ESG risk issues. 
  • Although the agreement between the company and the union was reached last week, the conflict between the two parties over the sales losses during the strike is ongoing. 

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Jul 28
0

Daily Brief ESG: The State of Listed Companies Should Be Discussed Together with Discussion of Quarterly Disclosure and more

By | Daily Briefs, ESG

In today’s briefing:

  • The State of Listed Companies Should Be Discussed Together with Discussion of Quarterly Disclosure

The State of Listed Companies Should Be Discussed Together with Discussion of Quarterly Disclosure

By Aki Matsumoto

  • The proposal is to reduce the workload on companies by eliminating the requirement for quarterly disclosure in the annual securities report and instead submitting the financial results to the TSE.
  • Future discussions will focus on how much of the new sustainability disclosures. Listed companies are diverse, and while a few companies are proactive, many are backward-looking in their efforts.
  • In conjunction with the quarterly disclosure, the time has come to discuss how listed companies should be. 300 companies are allowed to list without meeting the prime market listing criteria.

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Jul 27
0

Daily Brief ESG: Nitori’s Biggest Challenge and more

By | Daily Briefs, ESG

In today’s briefing:

  • Nitori’s Biggest Challenge, the Succession Plan, Is an Even Bigger Risk

Nitori’s Biggest Challenge, the Succession Plan, Is an Even Bigger Risk

By Aki Matsumoto

  • Nitori attributed the missed profit guidance to foreign currency forward contract approach changes a few years ago, which resulted in missed foreign currency projections.
  • Since Nitori changed its FX forward approach several years ago for a reason, it’s concerned about the impact on Nitori’s business if it were to return to its original approach.
  • The approach of relying on the market views of Mr. Nitori is not sustainable. The biggest challenge, the Succession problem, adds to the risk of finding a market genius.

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Jul 25
0

Daily Brief ESG: AGM Is the Highest Body for a Company and more

By | Daily Briefs, ESG

In today’s briefing:

  • AGM Is the Highest Body for a Company, but Have Japanese Companies Got Too Used to It Not Being So?

AGM Is the Highest Body for a Company, but Have Japanese Companies Got Too Used to It Not Being So?

By Aki Matsumoto

  • The fact at least 80% of votes are approved in company agenda shows how large the presence of ruling shareholders is and how little interest there is from ordinary shareholders.
  • The ruling shareholder structure with cross-shareholdings has made this watered-down for Japanese companies. Companies should strive to increase shareholder interest. To this end, information disclosure efforts must be promoted.
  • Companies are encouraged to make efforts to disclose sufficient information to shareholders, not after AGM, but before it, which is the highest body of the company in the first place.

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Jul 23
0

Daily Brief ESG: Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies and more

By | Daily Briefs, ESG

In today’s briefing:

  • Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies

Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies

By Aki Matsumoto

  • It can be said that companies that do not specify cash allocation and only execute shareholder return, thus encouraging shareholders to find and invest in reinvestment targets on their own.
  • Since the stock valuations of companies as a whole haven’t increased, investment capital has gone to a few companies with high profitability, raising gap between profitability and valuations among companies. 
  • If the information asymmetry between management and investors could be bridged, even changes in the capital structure could have an impact on stock prices.

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Jul 22
0

Daily Brief ESG: Major Theft in ICICI Bank’s Currency Chest Heightens Concerns of Poor Controls and more

By | Daily Briefs, ESG

In today’s briefing:

  • Major Theft in ICICI Bank’s Currency Chest Heightens Concerns of Poor Controls

Major Theft in ICICI Bank’s Currency Chest Heightens Concerns of Poor Controls

By Hemindra Hazari

  • Major theft of Rs 342 mn ($4.3mn) in ICICI Bank Ltd (ICICIBC IN) ‘s currency chest near Mumbai
  • Apparently a single ICICI Bank staff responsible and shockingly had sole access to the currency chest 
  • Reflects extremely poorly on ICICI Bank’s currency chest security protocols and processes and heightens concerns of reputational and operational risk at the bank

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