Japan's 'good governance' index underperforms stocks it expelled

April 10, 2015 2:39 AM

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By Ayai Tomisawa TOKYO, April 10 (Reuters) - A Japanese stock index launched over a year ago to spotlight companies with high return on equity and other marks of good governance has run into a quandary: stocks expelled last summer because they no longer met the criteria have far outperformed the companies that replaced them.

Thirty stocks removed from the JPX-Nikkei Index 400 , including Sony Corp and Yamazaki Baking Co , gained 27 percent on average from Aug. 28 to March 31, data compiled by Okasan Securities shows. That excludes Skymark Airlines Inc, which filed for bankruptcy protection. By contrast, their 31 replace...

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