Daily BriefsJapan

Daily Brief Japan: Tokyo Stock Exchange Tokyo Price Index Topix, Mitsubishi Motors and more

In today’s briefing:

  • The BIG March 2023 “Wednesday Thursday Trade”
  • Mitsubishi Motors (7211) | Modelling the Mid Term Plan
  • Who Is More Culpable, “Independent” Directors or or Domestic Institutions that Bias To the Company?

The BIG March 2023 “Wednesday Thursday Trade”

By Travis Lundy

  • Every year it’s the same trade. But it isn’t really. But it kinda is. This year it is Wednesday and Thursday. There are risks to the analysis – notably allocation.
  • But, ceteris paribus, it is still possibly a ¥1,580,876,450,407 buying spree to take place on one day into the close later this month. Or something close to it.
  • And for a two-day period, over the last ten years, the average return is 1.60% on these two days with a 9:1 win ratio. Lots of angles here.

Mitsubishi Motors (7211) | Modelling the Mid Term Plan

By Mark Chadwick

  • The stock is down sharply over the past few weeks as investors price in higher interest rates and weaker spending on durables
  • Mitsubishi recently unveiled its mid-term plan and further details on its electrification strategy
  • If management can hit its targets, the stock would have significant upside. We have our doubts

Who Is More Culpable, “Independent” Directors or or Domestic Institutions that Bias To the Company?

By Aki Matsumoto

  • Surprisingly, about half of shareholders did not vote in favor of the shareholder proposal to remove outside directors who implemented practices that were problematic in terms of corporate governance.
  • Domestic institutional investors are still unwilling to oppose the company even when, as in this case, there is a clear corporate governance problem with the company.
  • It’s extremely difficult for these outside directors to fully fulfill their responsibilities as independent directors on a board composed of “independent directors” who are friends brought in by top management.

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