Bloomberg- Hedge funds are shifting Asian investments out of Japan because of lower returns and poor corporate governance in the region’s biggest economy, said Kathy Matsui, Goldman Sachs Group Inc.chief strategist in Tokyo.
Japan’s average return on equity will be about 10.2 percent this fiscal year, compared with 20 percent in the U.S. and 15.7 percent in Asia, according to Matsui. Return on equity is a measure of how well a company uses its cash to generate profit.
Meanwhile, Japanese companies are fending off purchases by foreign firms seeking to boost share prices, by buying stakes in each other or taking so-called poison pill measures. Some 400 Japanese companies, or 10 percent of all publicly traded firms, have taken steps to ward off hostile takeovers, according to a Nikkei newspaper survey published in October.
“I meet foreigners all the time; there has been disappointment with the Japanese market,” Matsui said in a telephone interview. “So Japan has been the favorite short, and that’s been the price action.”
