The Tokyo Stock Exchange’s big push to improve shareholder value is missing some big names. On Monday, the bourse released a long-awaited list meant to showcase which companies have taken steps to improve capital efficiency. Just 40% of the 1,656 prime-listed firms made it, underscoring the long road ahead for Japan Inc to lift valuations. But what’s more disappointing is the omission of many influential corporate titans.
Marquee names like Toyota Motor (7203.T), Fast Retailing (9983.T), Nintendo (7974.T) and SoftBank Group (9984.T) are conspicuously absent. The 20 largest companies whose names are missing from the list make up about a quarter of the Nikkei 225’s market value. Toyota said its plan for "growth with stakeholders" was effectively the same as what the bourse was requesting. The company may have a point: the stock has returned some 62% over the past year, outperforming a 42% return in the broader index. It also reported a record operating profit in its second quarter and announced a big buyback to please investors. Even so, in a consensus-driven country, if corporate leaders can’t be bothered to heed the TSE’s calls, then efforts to spur smaller laggards into action will be harder.
The good news is that the publication will be updated on a monthly basis. Rising peer pressure and shareholder activism, including recent campaigns in Seven & I (3382.T) and Fujitec Co (6406.T), should help, then. The Topix (.TOPX), already up 6% this year, is outperforming all other major global indices. The rally can only be sustained if Japan Inc’s heavy hitters start taking Tokyo’s corporate governance efforts seriously. (By Anshuman Daga)
Follow @Breakingviews on X
Capital Calls – More concise insights on global finance:
UK homebuilders' optimism calls for reality check read more
Short attack intensifies Grifols' health problem read more
Pandora trinkets debunk luxury resilience myth read more
Cognac has larger problems than China's new probe read more
ECB hardliners are running out of excuses read more
