In today’s briefing:
- Determining the Cause of the Sluggish ROE Growth Is More Important for Future ROE Increases
Determining the Cause of the Sluggish ROE Growth Is More Important for Future ROE Increases
- TSE data (April 2022-October 2023) shows that the correlation between TOPIX and ROE for prime market listed companies is extremely low, while the correlation between TOPIX and BPS is high.
- It may be that a company that can sustainably increase cash flow and build up net assets is more trustworthy than a temporary increase in profits.
- It’s presumed that the company increased EPS to the extent that it did not reduce ROE and implemented a certain degree of shareholder return to slow the increase in BPS.
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