Cash hoarding is a major issue for Asian companies from Japan and Korea by Michael Fritzell

Cash hoarding is a major issue for Asian companies from Japan and Korea by Michael Fritzell

Hear Michael Fritzell from Asian Century Stocks discuss the issue of cash hoarding in Asian companies specifically the Japanese and Koreans.

“Whereas in Asia, I think there are two main problems. One is cash hoarding and that’s especially prevalent in Japanese and Korean families. They tend to think that the listed company is theirs. It’s almost like their treasure chest. As a minority shareholder, you come there as a foreigner, with a white face and you, they will look at you and say, they don’t think that you’re equal, of course, obviously, and they’re in control as well. So you really have no bargaining power. So cash hoarding is almost the norm in Korea, Japan, and maybe Hong Kong as well, to some extent. So capital allocation. Capital is not allocated efficiently. It’s not paid out as dividends, they’re not buying back shares or they’re not investing it intelligently. They’re just putting it on a balance sheet and letting it accumulate. That’s not good for long-term returns. So that’s one issue. And to deal with that, I think you need to find people who are thinking rationally from a minority investor’s point of view, for example, you do buybacks. If you see buybacks in Japan. Huge positive …” – Michael Fritzell

Main Site: https://www.analyse.asia/will-the-stocks-from-china-recover-asian-century-stocks-with-michael-fritzell/
Full YouTube Video: https://youtu.be/RxewaGWEttU
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#corporategovernance #capitalallocation #stockmarket #stockmarketanalysis #stockmarketinvesting #Japan #Korea #cashhoarding

You can find Michael Fritzell’s Asian Century Stocks: https://www.asiancenturystocks.com/ and on Linkedin: https://www.linkedin.com/in/michael-fritzell-1aab10/ and X: https://twitter.com/mikefritzell