In the 2007 financial year, 70 of the companies in Japan’s Topix 100 index raised dividends, 23 despite falling earnings. Of the rest, 23 maintained dividend payments and only 3 cut them.
The news will encourage investors in Japanese stocks, who in recent months have had to deal with a steadily declining Nikkei index and fears about a stalling economy. It also comes at a critical time in the debate about corporate governance in Japan, with the long-running dispute between hedge fund TCI and utility Electric Power Development (J-power) reaching a new level of intensity in late May when J-power issued a letter complaining that TCI’s calls for increased dividends were selfish and damaging to the utility’s long-term investment plans.
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