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>This article discuss the degree of improvement in corporate governance practice initiatives over the past year, focusing on companies that have chosen a new market segment, particularly the prime market.</li>
<li>Many companies that chose prime market have made progress in addressing the listing standards, and as a result, have made improvements primarily in board practice criteria specified in those standards.</li>
<li>Retirement of treasury stock is also related to the listing criteria. For the other key actions, no significant trends were found, as it depends on the situation of each company.</li>
</ul>


This article discuss the degree of improvement in corporate governance practice initiatives over the past year, focusing on companies that have chosen a new market segment, particularly the prime market.
Many companies that chose prime market have made progress in addressing the listing standards, and as a result, have made improvements primarily in board practice criteria specified in those standards.
Retirement of treasury stock is also related to the listing criteria. For the other key actions, no significant trends were found, as it depends on the situation of each company.


Japan's Governance: Has Corporate Governance of Companies that Have Chosen Prime Market Improved?

<ul>
<li>This article analyzes the corporate governance status of 1,713 companies in the Metrical Universe that have disclosed their new market selection.</li>
<li>Companies that chose Prime Market were more advanced than those that chose the other markets in the % of independent directors and the independence of their nominating and compensation committees.</li>
<li>Key actions show that companies that chose Prime Market outperform those that chose other markets in growth policy, dividend policy, frequency of share retirement and AGM disclosure, excluding policy-shares/total assets.</li>
</ul>


This article analyzes the corporate governance status of 1,713 companies in the Metrical Universe that have disclosed their new market selection.
Companies that chose Prime Market were more advanced than those that chose the other markets in the % of independent directors and the independence of their nominating and compensation committees.
Key actions show that companies that chose Prime Market outperform those that chose other markets in growth policy, dividend policy, frequency of share retirement and AGM disclosure, excluding policy-shares/total assets.


Japan's Governance: Prime Market Selection and Corporate Governance Initiatives

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591)</a> replaces <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303)</a> in the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225</a> at the close of trading on 1 April due to Shinsei Bank not trading on the Prime Market.</li>
<li>We estimate there will be passive buying of 27.5m shares on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a> while there will be selling of 2.75m shares on <a href="https://www.smartkarma.com/entities/shinsei-bank-ltd" target="_blank" data-smartkarma-citation="entities:16897:1" rel="noopener">Shinsei Bank (8303 JP)</a> </li>
<li>There appears to be some pre-positioning on <a href="https://www.smartkarma.com/entities/orix-corp" target="_blank" data-smartkarma-citation="entities:9936:1" rel="noopener">Orix Corp (8591 JP)</a> - the stock could outperform heading into index inclusion. </li>
</ul>



Orix Corp (8591) replaces Shinsei Bank (8303) in the Nikkei 225 at the close of trading on 1 April due to Shinsei Bank not trading on the Prime Market.
We estimate there will be passive buying of 27.5m shares on Orix Corp (8591 JP) while there will be selling of 2.75m shares on Shinsei Bank (8303 JP) 
There appears to be some pre-positioning on Orix Corp (8591 JP) - the stock could outperform heading into index inclusion. 


Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

<ul>
<li>This article examines changes in corporate governance practices of 1,713 as well as changes in market caps, viewing the improvement in profitability as a change in ROA.</li>
<li>While ROA improvements haven’t motivated board practices to improve, they've tended to pay more attention to use of cash in key actions, but are somewhat biased toward shareholder-returns than investments.</li>
<li>Lower valuations were the main reason for the largest declines in market capitalization for the companies with the largest improvements in ROA over the last 13 months.</li>
</ul>


This article examines changes in corporate governance practices of 1,713 as well as changes in market caps, viewing the improvement in profitability as a change in ROA.
While ROA improvements haven’t motivated board practices to improve, they've tended to pay more attention to use of cash in key actions, but are somewhat biased toward shareholder-returns than investments.
Lower valuations were the main reason for the largest declines in market capitalization for the companies with the largest improvements in ROA over the last 13 months.


Japan's Governance: Do Companies Improve Their Corporate Governance when Profitability Improves?

<ul>
<li>This article focuses on the question: Do profitable companies improve corporate governance?</li>
<li>The more profitable companies tend to use the cash generated in a more thoughtful manner, while we can't say that they are more engaged in board practices.</li>
<li>The high percentage of foreign shareholders in companies with high ROA may be related to the fact that these companies have become more careful about how they use cash flow.</li>
</ul>


This article focuses on the question: Do profitable companies improve corporate governance?
The more profitable companies tend to use the cash generated in a more thoughtful manner, while we can't say that they are more engaged in board practices.
The high percentage of foreign shareholders in companies with high ROA may be related to the fact that these companies have become more careful about how they use cash flow.


Japan's Governance: Do Profitable Companies Improve Corporate Governance?

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)

Japan's Governance: Has Corporate Governance of Companies that Have Chosen Prime Market Improved?

In relation to TOPIX reforms along to TSE's market reclassification, this article examines how companies that chose Prime Market have improved...

Metrical Inc

Japan's Governance: Prime Market Selection and Corporate Governance Initiatives

Companies have disclosed their market choice as to which of the new markets they will list on. This article will discuss the status of corporate...

Metrical Inc

Nikkei 225 Index Rebalance: ORIX (8591) Replaces Shinsei Bank (8303)

Orix Corp replaces Shinsei Bank in the Nikkei225 Index at the close on 1 April. Passive trackers will need to buy 27.5m shares of Orix and sell...

Brian Freitas

Japan's Governance: Do Companies Improve Their Corporate Governance when Profitability Improves?

I will examine the question of whether the impact of improved profitability, rather than whether profitability is high or low right now, might...

Metrical Inc

Japan's Governance: Do Profitable Companies Improve Corporate Governance?

This article focuses on the question: Do profitable companies improve corporate governance? I examined the corporate governance practices by using...

Metrical Inc