Overseas investors have raised their share of corporate Japan to a record high, hoping that its weak stock market will come alive and prospects that more foreign share ownership might shake up corporate Japan.
David Turner of the Financial Times writes that international investors increased their stake in the stock market to 28 per cent in March from just over 26 per cent in 2006 and only 4.7 per cent in 1990, according to figures released by the Tokyo Stock Exchange and four smaller Japanese bourses.
Patrick Mohr, director of equity research at Nikko Citigroup, said foreigners had bought Japanese shares because of hopes about a consumer-led economic recovery, a rise in the prices companies can charge, and the prospects of shareholder activism. “It may be only the third one – expectations for activism – that shows any sign of igniting”.
Another advatage of investing in Japan is its low correlation to the S&P 500 index. Over the past five years it has been only 29%.
