Daily Brief Japan: Softbank Group, Mitsubishi Heavy Industries, Tokyo Stock Exchange Tokyo Price Index Topix and more

In today’s briefing:

Softbank Group – ARM Suing a Key Customer Is Not the Summer News We Expected
Mitsubishi Heavy Industries (7011) | Green Transition Bonds
Should Move to a Legally Binding Structure to Prevent Corporate Governance from Becoming a Skeleton

Softbank Group – ARM Suing a Key Customer Is Not the Summer News We Expected

ARM is suing Qualcomm for breach of license and trademark infringement for its acquisition of (fellow ARM licensee) Nuvia last year
This is surprising on a number of levels as having Qualcomm inside the tent is better for sales, market share and its neutral-player reputation
ARM’s valuation benefits from perceptions of an expanding addressable market so this is not a good look. Meanwhile, Softbank’s discount to NAV is widening again as tech valuations fall

MHI has a roadmap for becoming carbon neutral by 2040. The transition to a decarbonized society will be funded by green/transition bonds
MHI has issued its first green/transition bond amounting to 10 billion yen
We remain bullish on MHI and believe it is a key beneficiary of decarbonization trends in Japan

Cases of illegal transactions by the president of a company from the founding family should be handled in terms of legal violations before corporate governance.
If we focus on the issue of corporate governance, the problem is that the board of directors and statutory auditors have failed to fulfill their duties and cross-shareholdings were involved.
If corporate governance is not effective in practice, we should at least expect to see improvements in corporate governance practices in organizational forms that are more legally binding.

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