Obayashi Led EWJ, Plans to Dump Its Cross-Held Shares



EWJ’s top stocks

Earlier in this series, we saw why the iShares MSCI Japan ETF (EWJ) closed on a positive note on December 14, 2015. Now, let’s analyze the performances of various stocks that provided positive returns for EWJ.

EWJ’s top stocks were Obayashi, Maruichi Steel, and Japan Retail Fund Investments. They returned 1.9%, 1.7%, and 1.6%, respectively.

Article continues below advertisement

Key points on Obayashi 

On December 11, 2015, the company declared that it plans to dump its cross-held shares. It said that the reasons for holding the shares have faded. The company held 360 billion yen worth of shares in 300 companies at the end of September. These shares are used to strengthen business ties.

Now, the company decided to invest in renewable energy operations and acquire leasing properties. It will get a more stable revenue than the construction sector.

Currently, Obayashi is trading at 1,165 yen. Its 52-week high is 1,197 yen. Its 52-week low is 717 yen. Its current PE (price-to-earnings) ratio is 32.74x. Its current PBV (price-to-book value) ratio is 2.04x. The YTD (year-to-date) return is 48%. The quarterly return is 14%.

Japan Airport Terminal is one of Obayashi’s competitors. It fell by 1.9% on December 14, 2015. Currently, it’s trading at 5,630 yen. Its YTD return is 18%. Its quarterly return is 10%.

Other stocks

EWJ’s major holdings like Toyota (TM), Honda (HMC), Nissan (NSANY), Mizuho Financial Group (MFG), and Mitsubishi UFJ Financial (MTU) returned -2.8%, -1.6%, 0.3%, -0.8%, and -1.7% on December 14, 2015.

To learn more, read FEZ and EWJ Fall Sharply as Crude Oil Hits Multiyear Low.


More From Market Realist