Japan's Cross Shareholdings on the Rise Again
Cross ownership of publicly traded shares in Japan -- which was on the decline in the country's depressed economy in the 1990s when banks no longer could afford to maintain ownership of stocks at depressed prices -- is on the rise again. As of the end of September 2006, corporate equity ownership was up 17% year over year. According to Nikkei, in the past 2.5 years, cross-ownership has increased 31%, mainly as a tool to discourage hostile takeovers.
Cross share ownership has been considered a unique characteristic of Japan's equity market that serves to preserve the old corporate Keiretsu culture. What does this return mean to institutional investors? Will they have to watch liquidity factors more carefully?
Cross ownership of publicly traded shares in Japan -- which was on the decline in the country's depressed economy in the 1990s when banks no longer could afford to maintain ownership of stocks at depressed prices -- is on the rise again. As of the end of September 2006, corporate equity ownership was up 17% year over year. According to Nikkei, in the past 2.5 years, cross-ownership has increased 31%, mainly as a tool to discourage hostile takeovers.
Cross share ownership has been considered a unique characteristic of Japan's equity market that serves to preserve the old corporate Keiretsu culture. What does this return mean to institutional investors? Will they have to watch liquidity factors more carefully?
posted by Chako at 1:33 PM
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