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>TSE's request to raise P/B was issued March end, and the number of companies that have disclosed their improvement measures is still low, at only about 30% of all companies.</li>
<li>Companies are likely to use good examples, but because the factors that increase share price vary from company to company, companies must offer their own solutions to their own situations.</li>
<li>Investors don't want to see "P/B improvement plan" that follows the template, but want to see compelling measures that demonstrate cash flow growth, which is based on share price appreciation.</li>
</ul>


TSE's request to raise P/B was issued March end, and the number of companies that have disclosed their improvement measures is still low, at only about 30% of all companies.
Companies are likely to use good examples, but because the factors that increase share price vary from company to company, companies must offer their own solutions to their own situations.
Investors don't want to see "P/B improvement plan" that follows the template, but want to see compelling measures that demonstrate cash flow growth, which is based on share price appreciation.


Investors Do Not Want to See A "P/B Improvement Plan" That Follows a Template

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

TSE Tokyo Price Index TOPIX / Event-Driven

<ul>
<li>On 8 May I wrote <a href="https://www.smartkarma.com/insights/japan-flow-foreign-investor-inflows-may-increase" target="_blank" data-smartkarma-citation="insights:101617" rel="noopener">JAPAN FLOW: Foreign Investor Inflows May Increase</a>.  Since the data used in that insight, TSE data shows net foreign buying of ¥3.5trln+. </li>
<li>Investor flows appear to work in patterns which are correlated to TOPIX gains and outperformance vs S&amp;P500. </li>
<li>The history of autocorrelation of net buying suggests while the current streak may end, a four week average of net buys could remain positive for a while. </li>
</ul>


On 8 May I wrote JAPAN FLOW: Foreign Investor Inflows May Increase.  Since the data used in that insight, TSE data shows net foreign buying of ¥3.5trln+. 
Investor flows appear to work in patterns which are correlated to TOPIX gains and outperformance vs S&amp;P500. 
The history of autocorrelation of net buying suggests while the current streak may end, a four week average of net buys could remain positive for a while. 


JAPAN FLOW: Foreign Investor Inflows Increased; Next Is Foreigners Vs Buybacks Vs GPIF

<ul>
<li>For years I have tracked investor category flows in Japanese stocks because I find them quite informative. I write about them every so often in an insight series JAPAN FLOW.</li>
<li>The series, which I have written about for years, suggests foreign investors invest in Japan pro-cyclically and that correlates well to one relatively simple indicator. </li>
<li>The policy backdrop points to greater corporate buying, greater foreign flow, greater selling by individuals and trust banks. The current timing probably matches. </li>
</ul>


For years I have tracked investor category flows in Japanese stocks because I find them quite informative. I write about them every so often in an insight series JAPAN FLOW.
The series, which I have written about for years, suggests foreign investors invest in Japan pro-cyclically and that correlates well to one relatively simple indicator. 
The policy backdrop points to greater corporate buying, greater foreign flow, greater selling by individuals and trust banks. The current timing probably matches. 


JAPAN FLOW: Foreign Investor Inflows May Increase

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> could price their secondary offering after market close today. The stock is down 10.5% since the rumors of the placement began 7 trading sessions ago.</li>
<li>The <a href="https://www.smartkarma.com/entities/philadelphia-stock-exchange-semiconductor-index" target="_blank" data-smartkarma-citation="entities:32992:1" rel="noopener">Philadelphia Stock Exchange Semiconductor Index (SOX INDEX)</a> has been dropping over the last few days and is 8.6% lower over the last 8 trading days.</li>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> has been trading higher on expectations of index inclusion in August, but that could move to November now.</li>
</ul>



Kokusai Electric (6525 JP) could price their secondary offering after market close today. The stock is down 10.5% since the rumors of the placement began 7 trading sessions ago.
The Philadelphia Stock Exchange Semiconductor Index (SOX INDEX) has been dropping over the last few days and is 8.6% lower over the last 8 trading days.

Kokusai Electric (6525 JP) has been trading higher on expectations of index inclusion in August, but that could move to November now.


Kokusai Electric (6525 JP): Placement Price Could Be Determined Today; Index Impact Could Be Delayed

<ul>
<li>Companies with large shareholders' interests of 20% or more account for 779 of 1,784 companies in Metrical Universe. A number of companies are investment targets as TOB  and MBO candidates.</li>
<li>Companies with large shareholder influence may feel distanced from general corporate governance practices, but their interests are aligned with those of minority shareholders in terms of shareholder-oriented management.</li>
<li>For quality markets, it's necessary to reduce the number of companies by increasing TOBs and MBOs, and to do so, managers need to be aware of the cost of listing.</li>
</ul>


Companies with large shareholders' interests of 20% or more account for 779 of 1,784 companies in Metrical Universe. A number of companies are investment targets as TOB  and MBO candidates.
Companies with large shareholder influence may feel distanced from general corporate governance practices, but their interests are aligned with those of minority shareholders in terms of shareholder-oriented management.
For quality markets, it's necessary to reduce the number of companies by increasing TOBs and MBOs, and to do so, managers need to be aware of the cost of listing.


For Increasing TOBs and MBOs, Managers Should Be Aware of Listing Costs and PE Market Should Expand

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)

Investors Do Not Want to See A "P/B Improvement Plan" That Follows a Template

I would like to discuss the issues on the December 3 Nikkei article, "Low P/B Improvement Measures Disclosure Still 30%. This issue will be the...

Metrical Inc

JAPAN FLOW: Foreign Investor Inflows Increased; Next Is Foreigners Vs Buybacks Vs GPIF

Foreign Investor Flows in Japan matter. They always matter, and recently, more foreign investor flow has mattered more. History shows there is room...

Travis Lundy

JAPAN FLOW: Foreign Investor Inflows May Increase

JAPAN FLOW: Foreign flows matter in Japanese equities. Foreigners chase performance, individuals and trust banks fade it. This works over multi...

Travis Lundy

Kokusai Electric (6525 JP): Placement Price Could Be Determined Today; Index Impact Could Be Delayed

The Kokusai Electric secondary offering price could be determined today. A drop in the SOX Index and the possibility of index inclusion being...

Brian Freitas

For Increasing TOBs and MBOs, Managers Should Be Aware of Listing Costs and PE Market Should Expand

I would like to discuss the issues on the December 4 Nikkei article, "Investors on the Move, Targeting Founding Family Companies, in Search of Next...

Metrical Inc