Activism at Scale in Japan

Verdad

Daniel Rasmussen

Research

4 Pages

Verdad highlights the changes in capital allocation by Japanese companies since the Tokyo Stock Exchange issued a directive last year asking all companies with price-to-book ratios below 1x to issue a plan to get to 1x book.

As of June 30, 2024

Key Takeaways

Mass capital reallocation: Over half of TSE-listed firms disclosed plans to boost dividends, buy back shares, or sell assets to address low price-to-book ratios
Market response positive: Firms with concrete action plans have outperformed peers since the directive, indicating investor approval
Momentum building: Ongoing transparency and capital returns suggest Japan’s stock market rally may gain further ground
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