TOKYO -- Foreign ownership of shares in listed Japanese companies has climbed above 30% for the first time, and with it will likely come greater pressure on boards to make better use of capital and idle cash.
Foreigners held 30.8% of Japanese equities in value terms as of March 31, up 2.8 percentage points from the year-earlier level, a record high at the time.
They eclipsed financial institutions, whose share shrank 1.3 points to 26.7%, stock exchange data released Thursday shows.
Foreigners did roughly 60% of the trading in Japanese equities in the year ended March 31, buying a net 9.5 trillion yen ($92.2 billion) of shares.
Meanwhile, banks and insurers continued paring down holdings of stocks and other risky assets to make their balance sheets more resilient.
Unsurprisingly, foreign investors have been raising their bets on companies achieving earnings growth by tapping into domestic demand or hitching onto rising Asian economies. Seiko Epson's foreign ownership ratio rose 14.6 points on the year. Ryohin Keikaku, operator of the Muji retail chain, saw a 10.9-point increase.
With foreigners owning a bigger piece of Japanese business, "share price disparities are more likely to emerge depending on whether management is paying attention to shareholders," says Kazuyuki Terao of Allianz Global Investors Japan.