TOKYO: Many Japanese companies are boosting benefits for long-term shareholders in a bid to turn people who began investing in stocks under the country’s NISA tax-exempt investment program into stable shareholders.

Ahead of the first anniversary of the expanded Nippon Individual Savings Account program next January, companies are coming up with perks, such as giving away special products and inviting shareholders to events, to woo individual investors who tend to hold shares for a long time.

Behind the move are growing calls for listed companies to reward shareholders more through measures including dividend hikes. They see a stronger need to find new loyal shareholders as demands for improved capital efficiency force companies to sell shares in other companies held under cross-holding arrangements.

According to Daiwa Investor Relations Co., around 40 percent of listed companies that offer shareholder benefits give preferential treatment to long-term holders.

Food and beverage maker Kirin Holdings Co. will require investors from the end of December to hold shares in the company for at least one year to be eligible for benefits.

“We want many to remain our shareholders over the medium to long term,” a company spokesperson said.

Investors who hold shares for three years or more will receive “premium benefits,” which are seen including giving special products made by the Kirin group, in addition to regular benefits.

Sanrio Co., which makes and sells goods of Hello Kitty and other popular character brands, plans to invite from next September investors who have owned at least 6,000 shares for more than three years to events where they can interact with its characters online.

Apparel group Onward Holdings Co., which gives a catalog of its gifts to shareholders who own more than 1,000 shares, has added a one-year shareholding requirement to the benefit.

Food maker Fujicco Co. plans to gift its popular products from next March to investors who have owned shares for at least six months.

“We sought to prevent short-term trading for the purpose of gaining benefits,” said an official at a company that has introduced requirements for holding periods to its benefits scheme.

Such benefits, like dividends, are given to shareholders as of the record date.

The trend also reflects companies’ reactions to foreign investment funds that pressure firms to improve profitability and expand their rewards to shareholders quickly.

“Companies likely want shares to be held by individuals rather than activist (investors),” said Yuki Seto, researcher at Daiwa Institute of Research Ltd.

JIJI Press