Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>I would like to discuss the points on the Nikkei article, "Acceleration of Share Buybacks Suggests Undervaluation."</li>
<li>Companies should clarify their capital allocations policy. My analysis shows that companies that raised valuations could articulate capital allocation policies and communicate with investors on growth investment and shareholder returns.</li>
<li>Since information asymmetries between managers and investors exist, attention should be paid to capital allocation. My analysis shows that companies that retired treasury stock 3 or more-times have higher valuations.</li>
</ul>


I would like to discuss the points on the Nikkei article, "Acceleration of Share Buybacks Suggests Undervaluation."
Companies should clarify their capital allocations policy. My analysis shows that companies that raised valuations could articulate capital allocation policies and communicate with investors on growth investment and shareholder returns.
Since information asymmetries between managers and investors exist, attention should be paid to capital allocation. My analysis shows that companies that retired treasury stock 3 or more-times have higher valuations.


Certainly the Increase in Share Repurchases Is to Be Commended, But......

<ul>
<li>Î will discuss the issues on the Nikkei article, that reports Japan's labor productivity is the lowest among the G7 countries, and that the "engagement."</li>
<li>I believe that the lack of wage increases for Japanese workers may not be linked to their enthusiasm for their jobs, showing the OECD data on average annual wages.</li>
<li>Conversely, given wages that are lower wages, well-developed social infrastructure, and a workforce capable of producing a high-quality product, some managers would want to take advantage of this business environment.</li>
</ul>


Î will discuss the issues on the Nikkei article, that reports Japan's labor productivity is the lowest among the G7 countries, and that the "engagement."
I believe that the lack of wage increases for Japanese workers may not be linked to their enthusiasm for their jobs, showing the OECD data on average annual wages.
Conversely, given wages that are lower wages, well-developed social infrastructure, and a workforce capable of producing a high-quality product, some managers would want to take advantage of this business environment.


Why Japan's Labor Productivity and Engagement Index Is Low in International Comparisons?

<ul>
<li>I discuss the article with the argument that "Companies that have moved to take drastic shareholder returns in response to activist investors' proposals have seen their share prices rise conspicuously.</li>
<li>When the stocks continues to slump and there are no positive factors to be found in a company's performance, corporate actions such as TOBs and shareholder returns are the focus.</li>
<li>Companies that move aggressively to shareholder returns only after being proposed by activist investors have't given much thought to cash allocation, cost of capital, and corporate value (shareholder return) before.</li>
</ul>


I discuss the article with the argument that "Companies that have moved to take drastic shareholder returns in response to activist investors' proposals have seen their share prices rise conspicuously.
When the stocks continues to slump and there are no positive factors to be found in a company's performance, corporate actions such as TOBs and shareholder returns are the focus.
Companies that move aggressively to shareholder returns only after being proposed by activist investors have't given much thought to cash allocation, cost of capital, and corporate value (shareholder return) before.


Japanese Companies Targeted by Activist Investors Not Thinking of Cash Allocation, Corporate Value?

<ul>
<li>I have considered the Nikkei article, "Listed companies are being questioned on how they spend their cash."</li>
<li>More and more listed companies are also showing ROIC in their presentations, but it will take more time for both analysts and listed companies to understand the cost of capital.</li>
<li>Regarding the argument that using cash for share repurchases and dividends is effective, companies that retire treasury stock 3 or more times often have high profitability and higher stock valuations.</li>
</ul>


I have considered the Nikkei article, "Listed companies are being questioned on how they spend their cash."
More and more listed companies are also showing ROIC in their presentations, but it will take more time for both analysts and listed companies to understand the cost of capital.
Regarding the argument that using cash for share repurchases and dividends is effective, companies that retire treasury stock 3 or more times often have high profitability and higher stock valuations.


It Is a Good Trend that More Japanese Managers Are Using "Capital Allocation and Cash Allocation"

<ul>
<li>I would like to discuss the issues on the Nikkei article, "Discussions are underway to disclose human capital in annual securities reports in fiscal 2023."</li>
<li>It is good news for investors that the disclosure will be required in the legal documents. However, very few companies translate the document into English.</li>
<li>Companies should include content that matches the company's management policy. From the investor's standpoint, it's required to carefully analyze whether the disclosed information are consistent with the company's actual actions.</li>
</ul>


I would like to discuss the issues on the Nikkei article, "Discussions are underway to disclose human capital in annual securities reports in fiscal 2023."
It is good news for investors that the disclosure will be required in the legal documents. However, very few companies translate the document into English.
Companies should include content that matches the company's management policy. From the investor's standpoint, it's required to carefully analyze whether the disclosed information are consistent with the company's actual actions.


Human Capital Disclosure in 'Yuho' Report Is Good News, but There Are Challenges

Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

Why Japan's Labor Productivity and Engagement Index Is Low in International Comparisons?

Î would like to discuss the issues on the Nikkei article, that Japan's labor productivity is the lowest among the G7 countries, and that Japan's...

Metrical Inc

Japanese Companies Targeted by Activist Investors Not Thinking of Cash Allocation, Corporate Value?

I will discuss the argument that "Companies that have moved to take drastic shareholder returns in response to activist investors' proposals have...

Metrical Inc

It Is a Good Trend that More Japanese Managers Are Using "Capital Allocation and Cash Allocation"

I would like to discuss the issues on the Nikkei article, "Listed companies are being questioned on how they spend their cash."

Metrical Inc

Human Capital Disclosure in 'Yuho' Report Is Good News, but There Are Challenges

I would like to discuss the issues on the Nikkei article, "Discussions are underway to disclose human capital in annual securities reports in...

Metrical Inc

Certainly the Increase in Share Repurchases Is to Be Commended, But......

I would like to discuss the points on the Nikkei article, "Acceleration of Share Buybacks Suggests Undervaluation," showing the previous analyses.

Metrical Inc

Why Japan's Labor Productivity and Engagement Index Is Low in International Comparisons?

Î would like to discuss the issues on the Nikkei article, that Japan's labor productivity is the lowest among the G7 countries, and that Japan's...

Metrical Inc

Japanese Companies Targeted by Activist Investors Not Thinking of Cash Allocation, Corporate Value?

I will discuss the argument that "Companies that have moved to take drastic shareholder returns in response to activist investors' proposals have...

Metrical Inc

It Is a Good Trend that More Japanese Managers Are Using "Capital Allocation and Cash Allocation"

I would like to discuss the issues on the Nikkei article, "Listed companies are being questioned on how they spend their cash."

Metrical Inc

Human Capital Disclosure in 'Yuho' Report Is Good News, but There Are Challenges

I would like to discuss the issues on the Nikkei article, "Discussions are underway to disclose human capital in annual securities reports in...

Metrical Inc