BOJ NOW TOP 10 SHAREHOLDER IN 50% OF NIKKEI

Japan's central bank is quietly nationalizing its entire market. The BOJ has gone from being a Top 10 holder in 40% Japanese stocks last March, to 50% just one year later.

  • The Bank of Japan Is Now A Top-10 Shareholder In 50% Of All Japanese Companies.
  • Bank of Japan now owns a stunning 75% of all Japanese ETF
  • As of March 2018, the Japanese central bank had become a major shareholder in nearly 40% of all listed companies.
  • This, of course, in addition to the BOJ's trillions in Japanese JGB holdings, which at last check were over 100% of GDP and 43% of all outstanding.
  • The BOJ also become the top shareholder in 23 companies, including Nidec, Fanuc and Omron, through its ETF holdings, but as of Q1, it was among the top 10 holders for 49.7% of all Tokyo-listed enterprises.

The Bank of Japan will overtake a state-run pension fund - the world's largest - as the top shareholder in Tokyo-listed companies as early as 2020, even as concerns rise regarding the central bank's outsize role in the nation's capital market. Assuming that the bank maintains its current target of 6 trillion yen (just over $53BN at prevailing rates) in new purchases a year, its holdings would expand to about 40 trillion yen by the end of November 2020. This would place it above the Government Pension Investment Fund's TSE first-section holdings of more than 6%. In other words, Japan's central bank will soon be the biggest individual owner of Japanese stocks.

The BOJ is ushering in a new age for the Japanese market: the age of creeping nationalization, where a monetary authority is becoming the biggest owner of corporate assets using money printed out of thin air to fund the purchases.

The bank's ETF program "is eroding market discipline as companies are rewarded simply for being in major market indexes, rather than for having new business strategies or offering more dividends," the OECD said in a country survey published Monday, citing a previous Nikkei report.

"If the Nikkei Stock Average falls below about 18,000, the market value of the ETF holdings would fall below their book value,"

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ABSTRACTED FROM:  04-17-19 -  - "The Bank of Japan Is Now A Top-10 Shareholder In 50% Of All Japanese Companies"

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