pascal jeannenot

Mitsubishi UFJ to Expand in India, Receives License in Russia

You mentionned 'As of last September Mitsubishi UFJ Financial Group owned 61.2% of Mitsubishi UFJ Securities.', well as you know today's big news was the fact that MUFJ has decided to buy back 100% of MUFJ securities and therefore delist the sub form TSE. This is a very interesting move which can be translated as MUFJ considering its securities arm a sufficiently strategic asset to fully incorporate it with the group. Obviously this is a positive developement for MUFJ. This move also perfectly illustrate the more wider picture regarding Japanese parent companies new strategic view toward their listed subsidiaries : in short fully buy them out (and therefore delist) or sell them off. You can be sure than from the second quarter (september) such buy back/spin-off will increase substancially as Japanese management is keen to hear the arguments of the buyers investing in the parent companies. I feel this is also part of a more wider movement toward corporate governance principles in some way. In today's newsletter I mentionned an interesting article in the Nikkei Financial daily which stressed that some groups like Hitachi (but I would personnally add Matsushita or Toshiba nor to mention other listed groups like Nippon Steel) still have a plethoric number of subsidiaries (listed or not) and obviously target to 1- either totally buy back to increase consolidated earnings or 2-sell them off. The second option will soon be facilitated by TSE new set of rule to ease sell-off (or buy back) listed subsidiaries. Considering buyout funds are now knocking at japan's doors this precise business field will soon become hot.
I would specially take a close look at what Matsushita will decide regarding its corporate galaxy. In the long term obviously it sounds positive for the parent nor to mention Japanese retail investors if they screen with accuracy the next candidates for sale as listed subsidiaries fundamental ratios (Per, Pbr etc..) are usually less than the parent.