The Nikkei Shinbun, Japan’s premier financial daily, reported that the percentage of ownership of Japanese stock by foreign investors (on a value basis) rose 4.1 percentage points to 21.8 percent, a record figure.
This is higher than the amount held by individual investors (20.5%) and banks (5.8%).
A higher ratio of foreign ownership might mean that companies are forced (through the shareholders’ active exertion of ownership rights) to act in a more shareholder-friendly manner (higher dividends, anyone?). (Article dated June 19, 2004, Nikkei Net Online Edition.)
Practically speaking, I think this is good news for people seeking to invest in the Japanese market on a retail (individual) basis. Corporations find an increasing need to report their earnings in English as well as Japanese, and both the quality and quantity of information available about Japanese companies is improving.
Want to learn about investing in a Japanese company? First visit its official homepage and click on the “English” logo. Next, click on “Financial Information” or another button with the words IR, Investor Relations, or For our Shareholders. In most cases, you will find information in English.
If you like what you see, visit a local brokerage and ask about the stock. Unlike firms overseas, Japanese companies usually have high minimum share purchase requirements (100 shares, 1000 shares), so make sure you have enough cash to invest.
© 2004 Wendy J. Imura.