![]() Return on equity is a gauge of a company's profitability. Price-to-book value is the ratio of the total market value of a company's share price over its book value - a company's net assets. The exchange said in March that half the number of its "prime" listings - the most liquid stocks with the largest market capitalization - and about 60% of those in the "standard" listings have a return on equity of less than 8% and are trading at price-to-book value of less than one. The scale for change - or disappointment - is tremendous. ![]() Warren Buffett's bullish calls on Japanese equities has also helped boost confidence among foreign investors. Part of the optimism in Japanese stocks stems from how specific and tangible the Tokyo exchange's requirements are this time round. The exchange warned such companies could face the prospect of delisting as soon as 2026. Among the latest measures was one that directed listed companies to "comply or explain" if they are trading below a price-to-book ratio of one - an indication a company may not be using its capital efficiently. The Tokyo Exchange Group recently finalized its market restructuring rules. "The recent Tokyo Stock Exchange initiative is a game-changing moment, because it's going to challenge a lot of companies that are trading on less than one-time price-to-book to improve profitability and support their share price," said Oliver Lee, a Singapore-based client portfolio manager, at Eastspring Investments. Personal Loans for 670 Credit Score or LowerĪfter what turned out to be a false dawn a decade ago, when "Abenomics" first raised hopes of corporate governance reform in Japan, many seem to think better of the latest measures by the Tokyo exchange. ![]() Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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