003

Comparative analysis of foreign shareholder ratio and trading
volume by country 2016
November 30, 2017
International Disclosure Services Corporation
Note: This report has been created based on objective research, and does not constitute a recommendation of any particular methodof disclosure or presentation. This report has been created and compiled based on careful research, but its accuracy is notguaranteed. Copyright pertaining to this report belongs to International Disclosure Services Corporation, and it may not be
redistributed or reproduced without the permission of International Disclosure Services Corporation.

Contents
1. Foreign shareholder ratio and trading volume in the Japanese market ....................................................................... 1
Foreign shareholder ratio ...................................................................................................................................... 1
Trading volume ratio............................................................................................................................................. 2
2. Foreign shareholder ratios in other markets ............................................................................................................... 3
United States ......................................................................................................................................................... 3
United Kingdom ................................................................................................................................................... 3
Germany ............................................................................................................................................................... 4
France ................................................................................................................................................................... 4
Comparison between the Japanese market and other foreign markets .................................................................. 5

English disclosure targeting foreign investors is not currently a legal requirement in Japan. The Corporate Governance
Code directs companies to make decisions on English disclosure based on their own circumstances, and as such, theavailability and necessity for providing English documents is impacted greatly by the level of participation by foreign
investors in the Japanese market. Note that the creation of English translations for proxy statements is required by
securities listing regulations, albeit in a summarized format.
This report provides an overview of the foreign shareholder ratio and trading volume in Japan, based on publicly
available shareholder and trading volume reports provided by the Tokyo Stock Exchange. For comparison purposes
and to enable a more robust analysis, figures are also provided for select markets outside of Japan.

1. Foreign shareholder ratio and trading volume in the Japanese market
Foreign shareholder ratio
In the shareholder report analysis for 2016 published by the Tokyo Stock Exchange, 30.1% of Japanese stocks wereowned by foreign investors on a market price basis, an increase of 0.3% year-on-year (Table 1).
Despite a downturn from the record high of 31.7% seen in 2014, the figure has exceeded 30% in every year since 2013
– with the exception of 2015 – signaling a moderate increasing trend over the medium term (Figure 1).

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Comparative analysis of foreign shareholder ratio and trading volume by country 2016

Trading volume ratio
In the trading volume report analysis for 2016 published by the Tokyo Stock Exchange, 70.3% of trading volume in
the Japanese market was by foreign investors, an increase of 2.6% year-on-year (Table 1). This marks the first time thatover 70% trading volume was by foreign entities, and although it remains to be seen whether or not such high levels
will be sustainable, the increasing trend has continued since 1988 (Figure 1).
For the purposes of calculating volume, consigned trading is tabulated by category based on information submitted bycomprehensive trading participants with capital of 3.0 billion yen or more (excluding internal transactions). Consigned
trading accounted for 82.3% of all transactions during 2016.
Table 1 Foreign shareholder ratio and trading volume in the Japanese market(%)
Foreign shareholder ratio
Trading volume by foreign entities
Year
1982
7.6
15.5
1983
8.8
18.3
1984
7.4
17.8
1985
7.0
16.5
1986
5.3
14.8
1987
4.1
13.4
1988
4.3
10.1
1989
4.2
11.3
1990
4.7
13.1
1991
6.0
18.11992
6.3
23.4
1993
7.7
23.1
1994
8.1
27.0
1995
10.5
26.6
1996
11.9
29.7
1997
13.4
35.2
1998
14.1
39.2
1999
18.6
38.6
2000
18.8
42.4
2001
18.3
51.8
2002
17.7
49.5
2003
21.8
46.1
2004
23.3
47.9
2005
26.3
45.1
2006
27.8
54.2
2007
27.4
60.9
2008
23.5
63.3
2009
26.0
53.0
2010
26.7
62.3
2011
26.3
65.7
2012
28.0
65.8
2013
30.8
58.1
2014
31.7
63.8
2015
29.8
67.7
2016
30.1
70.3

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Comparative analysis of foreign shareholder ratio and trading volume by country 2016

[%]

80.0
70.0

Trading volume by foreignentities

60.0
50.0
40.0

Foreign shareholder ratio

30.0
20.0
10.00.0
1982

1987

1992

1997

2002

2007

2012

Figure 1 Foreign shareholder ratio and trading volume in the Japanese market

2. Foreign shareholder ratios in other markets
For comparison with the foreign shareholder ratio and trading volume in the Japanese market, similar analyses weremade for markets in other countries (Table 2 and Figure 2). Note that statistics for trading volume by foreign entities
were unavailable, and only shareholder ratios are provided here.
United States
The foreign shareholder ratio in the United States was 13.6% in 2016 according to figures published by the Departmentof the Treasury, down 0.8% year-on-year. Although this may seem low in comparison to other countries, it has been
increasing steadily since 2006.
United Kingdom
The Office for National Statistics publishes foreign shareholder ratio figures every two years. In 2016, the foreign
shareholder ratio was 53.9%, up 0.2% compared with 2014. This is a level surpassed only by Germany, with the number
rising continuously since 2006.

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Comparative analysis of foreign shareholder ratio and trading volume by country 2016

Germany
The Deutsche Bundesbank is tasked with publishing foreign shareholder ratios, with figures unavailable for 2015 and2016. The most recent data are for 2014, indicating a foreign shareholder ratio of 57.1%, down 0.1% year-on-year. Thisis the highest level for the five countries covered in this report, and it has not fallen below 50% from 2006 onward.
FranceThe foreign shareholder ratio for 2016 was 44.5% according to the Banque de France, a decrease of 0.8% year-on-year.
This is a high level exceeded only by Germany and the United Kingdom, exceeding 40% in every year since 2006.
Table 2 Foreign shareholder ratio in other foreign markets(%)

Country

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

United States

8.9

9.6

10.1

9.8

11.1

12.1

13.4

13.6

14.3

14.4

13.6

United Kingdom

40.0

-

41.5

-

43.1

-

53.3

-

53.7

-

53.9

Germany

53.6

58.8

51.6

54.6

55.1

54.2

55.4

57.2

57.1

-

-

France

46.3

41.2

41.7

43.5

41.9

44.2

47.3

47.8

46.1

45.3

44.5

Japan

27.8

27.4

23.5

26.0

26.7

26.3

28.0

30.8

31.7

29.8

30.1

[%]

70

Germany60
50

UnitedKingdom40

France30Japan

20United States

102 区間移動02006
Figure 22008

2010

2012

2014

Foreign shareholder ratio in other foreign markets

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2016

平均 (UnitedKingdom)

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Comparison between the Japanese market and other foreign markets
Since 2013, the foreign shareholder ratio in Japan has exceeded 30%, which may seem high at first glance. However,for the past ten years, the figure has exceeded 50% in both the United Kingdom and Germany, and is over 40% in
France. With the exception of the United States, a ratio of less than 20%, the foreign shareholder ratio in Japan is still
relatively low for a developed economy. Although the unique characteristics of the Japanese market must be taken intoaccount, there is still room for growth.

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Comparative analysis of foreign shareholder ratio and trading volume by country 2016

International Disclosure Services Corporation
International Disclosure Services Corporation specializes in supporting the disclosure of information for investors
overseas, providing disclosure document translation services, research, and consulting services related to Englishlanguage disclosure. Inquiries related to this report and our services may be submitted through our website.
International Disclosure Services Corporation
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