(Bloomberg) -- Japanese firms are trying to build loyalty with individual investors to offset a wave of selling by institutions. 

Companies have historically doled out gifts including amusement park tickets and restaurant vouchers to entice regular people to buy stock. These perks are now reserved for just long-term shareholders at more than a third of companies that offer them, a four-fold increase from 10 years ago.

Pressure from the Tokyo Stock Exchange and regulators has led companies including insurers and banks to cut their cross-shareholdings that had traditionally shielded companies’ management from criticism. That’s made firms more vulnerable to activist investors and the gift strategy is designed to shore up support.  

“From a pure investor’s point of view, it’s kind of just wasting resources,” said Asymmetric Advisors analyst Tim Morse. “But from the company’s point of view, it might be positive to see some kind of relatively stable shareholders.”

SoftBank Corp. said last month it will offer points for its mobile payment service PayPay to shareholders who have held the stock continuously for at least one year. Only individual investors are eligible and institutional traders and foreign investors are excluded. The program will start in 2025. 

Other popular perks include Tokyo Disney Land operator Oriental Land Co.’s park tickets and McDonald’s Holdings Co. Japan’s gift cards. The practice of gifts dates back to more than 80 years, according to one study. 

Foreign activist investors have taken stakes in prominent companies including Nikon Corp. and Mitsui Fudosan Co. this year, part of a broader trend of targeting Japanese firms and pushing for higher dividends and asset disposals. 

Yuki Seto, a researcher at Daiwa Institute of Research, said that companies are feeling pressured as they lose once-stable investors through the unwinding of cross-shareholdings. Companies are now hoping that offering perks to long-term holders will help make them more resilient in possible proxy battles, he said.

Broadening the shareholder base also has the added benefit of creating additional demand for the stock, enhancing companies’ value.  

“Rewarding long-term investors could be a way to maintain the share price”, Kohei Onishi, a senior investment strategy researcher at Mitsubishi UFJ Morgan Stanley Securities Co. said. 


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