Japan Markets ViewTokyo Stock Exchange Travelling Across Japan to Promote “Request for Management Conscious of Cost of Capital”

 

[Keiichi Nakayama, QUICK Market Eyes] The Tokyo Stock Exchange’s (TSE) “Listed Company Support Group” is traveling across Japan to steadily promote “Action to Implement Management that is Conscious of Cost of Capital and Stock Price” that the TSE requested of companies. This specialized unit was established in January 2024 under the direct control of President & CEO Moriyuki Iwanaga. The group works closely with regional listed companies to encourage them to address the cost of capital. We explored its initiatives with themes that have a long way to go.

 

 

TSE Visiting Regional Companies and Working Closely with Them to Disseminate “Request for Management Conscious of Cost of Capital”

Mr. Sou Nidegawa of the Listed Company Support Group, recalls, “The group’s activities began with a lot of exploration, but now we have a much clearer view.” At its inception, the group consisted of only two members: the responsible department manager and Mr. Nidegawa. The group prepared for the lectures in various regions while exchanging opinions also with President & CEO Iwanaga. Mr. Nidegawa said, “Our regional visits made us realize that we had not conveyed to the management of listed companies our thoughts and intentions regarding the request for Management Conscious of Cost of Capital and Stock Price.”

The group is working on mainly two initiatives. One is a lecture program for management, given by TSE President & CEO Iwanaga. This program began in February and has already been conducted in 20 prefectures. In cooperation with regional securities companies, Mr. Iwanaga explains the background and purpose of the TSE’s request on capital cost. The other initiative is to offer support to corporate practitioners. The group has visited more than 57 companies and exchanged numerous opinions. This initiative includes a wide range of content, including events for corporate IR personnel.

 

*Source: Tokyo Stock Exchange, Initiatives by TSE’s Listed Company Support Group; The numbers of lectures already held, etc., are as of August 30.

 

In some cases, the group’s initiatives have helped companies respond to the request on capital costs. One example is TWINBIRD (6897), a Standard Market-listed company that manufactures home appliances. CFO Keizo Watanabe explained, “The lecture in February made us aware of the need to respond to the request (for the cost of capital) as a listed company, and we accelerated our efforts.” At the same time as the announcement of financial results for the fiscal year ending February 2024, the company unveiled its policy to realize Management Conscious of Cost of Capital and Stock Price. Mr. Watanabe enthusiastically stated, “This is the first year of our efforts, but we intend to make improvements for the next fiscal year and beyond, for instance, by setting priorities.”

The pace of initiatives such as lectures by the Listed Company Support Group has been accelerating recently. Mr. Nidegawa said, “At first, few securities companies were willing to cooperate in holding these events. However, the content is spreading by word of mouth.” While eight lectures were held from January to September, about 20 lectures are scheduled from October to March 2025.

The TSE stated, “Reform has just begun,” summarizing the situation as of August regarding Action to Implement Management that is Conscious of Cost of Capital and Stock Price. Through company visits, Mr. Nidegawa feels that corporate practitioners’ awareness is steadily changing. He added, “The goal is to have companies enhance their corporate value by starting with disclosing their responses to the request and brushing up on them. The road ahead is very long.” All eyes will be on whether the buds of change that have begun to bear fruit from these steady efforts will continue to grow.
(Reported on December 4)

 

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TSE’s Request for Management Conscious of Capital Cost and Stock Price – Disclosure of Discrepancies with Investors

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