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>The frequency of share repurchases is highly correlated not only with ROE and ROA, but also with changes in market capitalization, regardless of whether the stock is undervalued or not.</li>
<li>Since the frequency of share retirements was found to be correlated with key board practices, I examined hypothesis that an improvement in board practices would have positive impact on actions.</li>
<li>As a result of focusing on ％ independent directors, key to ensuring the transparency of board, it was confirmed that ％ independent directors has significant positive correlation with many actions.</li>
</ul>


The frequency of share repurchases is highly correlated not only with ROE and ROA, but also with changes in market capitalization, regardless of whether the stock is undervalued or not.
Since the frequency of share retirements was found to be correlated with key board practices, I examined hypothesis that an improvement in board practices would have positive impact on actions.
As a result of focusing on ％ independent directors, key to ensuring the transparency of board, it was confirmed that ％ independent directors has significant positive correlation with many actions.


Japan's Governance: Considerations Regarding Retirement of Treasury Stock

<ul>
<li>It is said that an increasing number of companies are cancelling their own shares to meet prime market listing criteria that requires % of tradable shares be at least 35%.</li>
<li>However, in reality, more than half of companies have never cancelled treasury stock. Companies that have retired three or more times perform significantly better in Key performance and Corporate Governance.</li>
<li>It is worthwhile to continue to focus on the retirement of treasury stock as a litmus test for assessing the progress of corporate governance initiatives and performance improvement.</li>
</ul>


It is said that an increasing number of companies are cancelling their own shares to meet prime market listing criteria that requires % of tradable shares be at least 35%.
However, in reality, more than half of companies have never cancelled treasury stock. Companies that have retired three or more times perform significantly better in Key performance and Corporate Governance.
It is worthwhile to continue to focus on the retirement of treasury stock as a litmus test for assessing the progress of corporate governance initiatives and performance improvement.


Japan's Governance: Prime Market Standard and Treasury Stock Retirement

<ul>
<li>This article will focus on TOPIX reform regarding policy shares. The biggest change in the way TOPIX's float ratio is calculated is the exclusion of policy shares from TOPIX float.</li>
<li>Companies with a large cross-shareholdings will see a downward impact on their stock prices. We expect to see a move to reduce policy holdings by the end of March.</li>
<li>It is also expected that there will be a move to transfer policy-holding shares to deemed-holding shares, which are considered floating shares. We should keep close eyes on such moves.</li>
</ul>


This article will focus on TOPIX reform regarding policy shares. The biggest change in the way TOPIX's float ratio is calculated is the exclusion of policy shares from TOPIX float.
Companies with a large cross-shareholdings will see a downward impact on their stock prices. We expect to see a move to reduce policy holdings by the end of March.
It is also expected that there will be a move to transfer policy-holding shares to deemed-holding shares, which are considered floating shares. We should keep close eyes on such moves.


Japan's Governance: TOPIX Reform Update (2) - Change in Calculation Method of Floating Share Ratio

<ul>
<li>On January 26, TSE disclosed the "Status of Compliance with the Corporate Governance Code (as of December 31, 2021)". This article would like to discuss this disclosure document.</li>
<li>TSE's latest disclosure covers 3,311 companies listed on the TSE 1st Section, 2nd Section, and JASDAQ Standard and reports on the status of compliance with the revised Corporate Governance Code.</li>
<li>How the principles of Corporate Governance Code required of companies listed on prime market are articulated in the future will have significant impact on the corporate governance practices of companies.</li>
</ul>


On January 26, TSE disclosed the "Status of Compliance with the Corporate Governance Code (as of December 31, 2021)". This article would like to discuss this disclosure document.
TSE's latest disclosure covers 3,311 companies listed on the TSE 1st Section, 2nd Section, and JASDAQ Standard and reports on the status of compliance with the revised Corporate Governance Code.
How the principles of Corporate Governance Code required of companies listed on prime market are articulated in the future will have significant impact on the corporate governance practices of companies.


Japan's Governance: From "Status of Compliance with the Corporate Governance Code" Disclosed by TSE

<ul>
<li>Few investors are able to analyze the details of policy holdings and deemed shareholdings and their trends without reading and analyzing the annual securities reports of each company in detail.</li>
<li>It is impossible to analyze the details of policy holdings and deemed shareholdings and their trends without reading and analyzing the annual securities reports of each company in detail.</li>
<li>Companies holding the deemed shareholdings performed the worst, even though the impact on the assets on balance sheet is limited because the deemed shareholdings are contributed to retirement benefit trusts.</li>
</ul>


Few investors are able to analyze the details of policy holdings and deemed shareholdings and their trends without reading and analyzing the annual securities reports of each company in detail.
It is impossible to analyze the details of policy holdings and deemed shareholdings and their trends without reading and analyzing the annual securities reports of each company in detail.
Companies holding the deemed shareholdings performed the worst, even though the impact on the assets on balance sheet is limited because the deemed shareholdings are contributed to retirement benefit trusts.


Japan's Governance: About the Article on Holding Shares Contributed to Retirement Benefit Trusts

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: Considerations Regarding Retirement of Treasury Stock

The frequency of retirement of treasury stock is correlated not only with ROE and ROA but also with changes in market cap. This is also correlated...

Metrical Inc

Japan's Governance: Prime Market Standard and Treasury Stock Retirement

It is true that the number of companies retiring their own shares increases along with TSE's market reorganization, but the reality is that the...

Metrical Inc

Japan's Governance: From "Status of Compliance with the Corporate Governance Code" Disclosed by TSE

On January 26, TSE disclosed the "Status of Compliance with the Corporate Governance Code (as of December 31, 2021)". This article would like to...

Metrical Inc

Japan's Governance: About the Article on Holding Shares Contributed to Retirement Benefit Trusts

If deemed shares are being used as a means of postponing cross-shareholdings, this is not only a problem in corporate governance, but also a point...

Metrical Inc

Japan's Governance: Considerations Regarding Retirement of Treasury Stock

The frequency of retirement of treasury stock is correlated not only with ROE and ROA but also with changes in market cap. This is also correlated...

Metrical Inc

Japan's Governance: Prime Market Standard and Treasury Stock Retirement

It is true that the number of companies retiring their own shares increases along with TSE's market reorganization, but the reality is that the...

Metrical Inc

Japan's Governance: TOPIX Reform Update (2) - Change in Calculation Method of Floating Share Ratio

This article will discuss the reform of TOPIX regarding policy stock holdings. While a move to reduce policy holdings is welcome, there would be a...

Metrical Inc

Japan's Governance: From "Status of Compliance with the Corporate Governance Code" Disclosed by TSE

On January 26, TSE disclosed the "Status of Compliance with the Corporate Governance Code (as of December 31, 2021)". This article would like to...

Metrical Inc

Japan's Governance: About the Article on Holding Shares Contributed to Retirement Benefit Trusts

If deemed shares are being used as a means of postponing cross-shareholdings, this is not only a problem in corporate governance, but also a point...

Metrical Inc