Japan's corporate cross-shareholdings are being unwound at an
ever-increasing pace as the historical ties have come to feel more
like handcuffs for modern management. But while in Germany - the
other major economy where corporate groupings built in the
aftermath of the Second World War are breaking up - the
exchangeable bond has been used extremely effectively a number of
times, it is yet to become a commonly used instrument in Japan. "We
are extremely keen to get the orthodox, corporate listed
exchangeable bond structure working in Japan," says Michael
Remington, a managing director in Credit Suisse First Boston's
investment banking division.
But there are obstacles that are making this and other
sophisticated equity capital markets techniques difficult to
establish.
Overwhelmingly the domestic banks are unwinding by simply selling
down their shareholdings into the market using the block trade.
In western markets, the risk of block trades is that a sudden...
