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Australia will hold a national election on May 21, after a six-week campaign period which center-right Prime Minister Scott Morrison hopes will bring him another come-from-behind victory.
Morrison’s Liberal National coalition is currently trailing the opposition Labor Party in opinion polling, but he was in a similar position ahead of the 2019 election and narrowly won another term in office, saying then he “always believed in miracles.”
Morrison is the first Australian leader to face two consecutive elections in almost 15 years, after a decade of political chaos in the country where prime ministers were regularly replaced by their own party over internal disputes.
But the prime minister has had a rough start to the 2022 election campaign period, with several members of his own party in recent weeks publicly airing their criticism of Morrison, including a sitting government senator and state politician. One week before the election was called, a former opponent of Morrison’s from the 2007 election accused the Australian leader of using racist slurs against him to win his seat in Parliament.
He has also been criticized over supply shortages during a recent omicron outbreak and mismanaging the response to flooding in the nation’s northeast.
The Australian leader has attempted to frame the vote around the country’s strong economic growth and national defense, highlighting unemployment rates which are at their lowest since 2008. Morrison also unveiled a series of spending measures last month to help soften the impact of rising living costs.
The opposition is focusing on domestic manufacturing and higher wages for workers. The Labor Party is also targeting Morrison personally over his handling of the Covid-19 pandemic.
The Tokyo Stock Exchange inaugurated its new top-tier Prime section on Monday, and all the familiar names were present, Toyota, Sony, Honda and the like.
And then there was Econach Holdings Co., which has 13 full-time employees and hasn’t paid a dividend since 1969. The company owns Thermae-yu, a bath and spa in a Tokyo red-light district that features a massage parlor, a pub and all-night service.
It is no insult to say that Econach operates at some distance from the stock exchange’s aim that Prime companies “center their business on constructive dialogue with global investors” and serve as “investment instruments for many institutional investors.” The bathhouse’s top-tier ranking can be chalked up, in part, to Japan’s respect for the venerable, an area in which Econach excels. Its history dates to 1926.
The exchange’s reshuffling, its biggest in 60 years, is intended to consolidate listings and create an elite group of globally competitive companies along the lines of Nasdaq’s Global Select class. Prime is designated for companies that meet thresholds for market value and other measures.
Some investors at first anticipated a wholesale culling of the more than 2,100 companies on the current top tier, known as the First Section.
But Tokyo officials, reluctant to force demotions on companies, many with decades or centuries of history, created a loophole. Companies that fell short of Prime requirements on paper could simply declare they made the cut and offer a plan to clear the thresholds later. No rush, though. There isn’t a deadline.
Hideo Okumura, who immersed Econach in the bathhouse business, said the company would have gladly accepted a lesser designation, if ordered to. But the company didn’t want to voluntarily sink to a lower rung, said Mr. Okumura, a company director.
Econach started life as Nippon Lace Co. During World War II, the company made electric heaters and military garments. When the postwar Tokyo Stock Exchange opened for business in 1949, it was listed on the First Section, the top tier.
As the decades rolled by, the company imported tuna and operated a golf course. Then Mr. Okumura cobbled together a plot of land in the densely built Kabuki-cho red-light district, a short walk from the world’s busiest train station, Shinjuku. The parcel ended up in Econach’s hands to develop, part of a portfolio that includes a commercial-residential building in Tokyo that it mostly owns.
At first, the company operated a parking lot on the site. Mr. Okumura said he considered other options, such as erecting a Ferris wheel. Rather than offer more entertainment, he said, the red-light district needed a place for locals and visitors to relax with good, clean fun.
The idea became Thermae-yu, a $22 million, six-level temple of bathing that trucks in 2,690 gallons of water a day from a hot spring 90 miles away. Aside from the baths, which cost anywhere from $20 to $26, there is a stone sauna where patrons lie on rocks heated to 118 degrees Fahrenheit. Bathing is good business in a country where dipping into hot springs is a national pastime.
Econach’s market capitalization, currently the equivalent of $40 million, would have to double to meet the Prime threshold. Its revenue in the first nine months of its current fiscal year, April to December 2021, was the equivalent of $4 million, about as much as Toyota Motor Corp. brings in every 10 minutes.
Tokyo Stock Exchange President Hiromi Yamaji said he wasn’t familiar with Econach’s business but that companies declaring themselves Prime-worthy should be closely scrutinized to ensure they are on track.
“Not only we, but the markets can check the progress as well,” Mr. Yamaji said. “And if the gap is big, we will request them to devise a plan.”
Econach’s president, Ryuta Suzuki, said the company’s Prime status shows investors it has high ambitions, which is helpful because the company wants to open more spas. “We don’t want to look like we’re not forward-looking, that we are not making an effort,” Mr. Suzuki said.
(Wall Street Journal)