Takeover bids and activist intervention are shoring up shares of some Japanese companies seen as having weak fundamentals, making it harder for investors to succeed in short-selling strategies.
Hints of the difficulty are starting to show in trading data. Japan’s percentage of short-selling to total trades is at the lowest since July last year, in terms of the 60-day moving average.
With mergers and acquisitions reaching a record of more than $230 billion last year in the country, and activists exerting greater influence on corporate Japan, investors from Sparx Asset Management to UBP Investments and Sigmoid Capital are becoming warier of nonearnings factors that may boost shares.
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