More Stocks Trade Below Book Value in Japan Despite Reforms
- Topix 500 firms trading below book value rise from March
- Governance reform must lead to higher ROE: SMBC’s Ito
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An increasing number of Japanese stocks are trading below book value despite corporate reforms that have attracted investor praise, suggesting managers need a bolder approach to drive shareholder wealth.
About 38% of Topix 500 companies were trading below book value as of end-September, up from 32.2% in March, according to data compiled by Bloomberg. That’s a reversal from an earlier falling trend, when the ratio dropped from 43.9% in December 2022 following the Tokyo Stock Exchange’s pressure on low valuation companies to roll out business improvement plans.