The $100bn ceiling Japanese companies cannot shatter
Nikkei -- Dec 15
At the end of 1989, with Japan's bubble economy blindly approaching the cliff's edge, Japanese companies made up about half the world's 100 most valuable corporations.

Now the country's only representative on that list is Toyota Motor.

The biggest factor behind Japanese companies' lackluster market performance is corporate chiefs' inability to make tough calls and focus resources on strategically important businesses. They are falling behind even as technological innovations and strategic acquisitions drive brisk corporate expansions across the world.

The remarkable rise of Procter & Gamble's market value compared with such Japanese companies as Fast Retailing and Rakuten serves as a prime example.

The American multinational consumer goods company has sold off its Pringles potato chip and Duracell battery brands and instead focused on laundry detergent, skin care and eight other core businesses over the past 20 years. Shareholders rewarded the company by lifting its value to $300 billion from $100 billion in that time.

On the other hand, the operator of the Uniqlo casual clothing brand has not been able to hit $70 billion, and Rakuten, Japan's leading e-commerce company, has lost steam after reaching $20 billion.

Similarly, the market value of Kao, a major Japanese consumer goods maker, has doubled, but just to $39 billion during the same period.

The Tokyo Stock Exchange is planning an overhaul of its market categories to bring back investors. It aims to create a "prime" market for selected blue chips, a category reserved for companies with strong investor appeal.

The move would remake TSE's swollen first section into a board for elite companies that can power the market's advance.

But such superficial changes may not be enough to lure back capital.

News source: Nikkei
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