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>Overseas investors feel that the disclosure of English documents by Japanese companies is slow-paced and the majority of overseas investors are not satisfied with the English disclosure.</li>
<li>Without sufficient disclosures in English, it is impossible to conduct a detailed analysis of the portfolio company. This also casts a shadow over engagement.</li>
<li>Given the narrowing coverage of sell-side analysts, companies should proactively disclose English-language materials at the earliest possible time. For long-term investors, English-language disclosures such as annual securities reports are also useful.</li>
</ul>


Overseas investors feel that the disclosure of English documents by Japanese companies is slow-paced and the majority of overseas investors are not satisfied with the English disclosure.
Without sufficient disclosures in English, it is impossible to conduct a detailed analysis of the portfolio company. This also casts a shadow over engagement.
Given the narrowing coverage of sell-side analysts, companies should proactively disclose English-language materials at the earliest possible time. For long-term investors, English-language disclosures such as annual securities reports are also useful.


Gap in Response to Disclosures in English Compared to the Growing Presence of Overseas Investors

<ul>
<li>The problem of agenda setting in engagement with investment firms is due to the mismatch that is occurring in each of the listed companies and investors.</li>
<li>Meetings without top management present disappoint investors who have prepared thorough analyses of the issues facing the portfolio company. Top management should also avoid listening to template questions at meetings.</li>
<li>It's unrealistic to ask passive funds that cannot devote resources not to ask template questions. Active funds of Japanese investment managers may have too many portfolio companies to engage adequately.</li>
</ul>


The problem of agenda setting in engagement with investment firms is due to the mismatch that is occurring in each of the listed companies and investors.
Meetings without top management present disappoint investors who have prepared thorough analyses of the issues facing the portfolio company. Top management should also avoid listening to template questions at meetings.
It's unrealistic to ask passive funds that cannot devote resources not to ask template questions. Active funds of Japanese investment managers may have too many portfolio companies to engage adequately.


Too Many Portfolio Companies Is One of the Reasons for Not Enough Engagement

<ul>
<li>Regardless of "TSE request," only 31% of prime market listed companies disclosed "measures to realize management with awareness of cost of capital and stock price" in their corporate governance reports.</li>
<li>The lack of ready disclosure measures on companies' side seems to be the reason why few companies disclosed information, but many of those that did are also poor in content.</li>
<li>For companies with large shareholders and low P/B, the parent company has not yet TOB or sold the company, which may be the reason for the delay in disclosure.</li>
</ul>


Regardless of "TSE request," only 31% of prime market listed companies disclosed "measures to realize management with awareness of cost of capital and stock price" in their corporate governance reports.
The lack of ready disclosure measures on companies' side seems to be the reason why few companies disclosed information, but many of those that did are also poor in content.
For companies with large shareholders and low P/B, the parent company has not yet TOB or sold the company, which may be the reason for the delay in disclosure.


Disclosure of Management Strategies with Cost of Capital and Stock Price in Mind Is Still Limited

<ul>
<li>Increase in the number of non-regular workers is a factor in gender wage disparity and has also put pressure on profit margin since labor was invested in low value-added jobs.</li>
<li>In Japan, childcare is assumed to be dependent on the efforts of the family, and there is little thought of society solving childcare issues, and government policies reflect this idea.</li>
<li>Problems also exist on the part of employers, with low rates of men taking childcare leave, and the top reason being an atmosphere that makes it difficult take childcare leave.</li>
</ul>


Increase in the number of non-regular workers is a factor in gender wage disparity and has also put pressure on profit margin since labor was invested in low value-added jobs.
In Japan, childcare is assumed to be dependent on the efforts of the family, and there is little thought of society solving childcare issues, and government policies reflect this idea.
Problems also exist on the part of employers, with low rates of men taking childcare leave, and the top reason being an atmosphere that makes it difficult take childcare leave.


At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Are we witnessing a short-term carry-trade unwind or trend change?</li>
<li>JPY's strength and overall market weakness continue to go hand in hand.</li>
<li>Any near-term bounce  be used to reduce exposure in certain sectors</li>
</ul>


Are we witnessing a short-term carry-trade unwind or trend change?
JPY's strength and overall market weakness continue to go hand in hand.
Any near-term bounce  be used to reduce exposure in certain sectors


Nowhere to Run to Baby, Nowhere to Hide! Part 1

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)

Gap in Response to Disclosures in English Compared to the Growing Presence of Overseas Investors

I would like to discuss the summary of the materials disclosed by the TSE on August 31 in the material of "English Disclosure Implementation Status...

Metrical Inc

Too Many Portfolio Companies Is One of the Reasons for Not Enough Engagement

I would like to discuss the issues on the "Status of Responses and Follow-up of Companies Regarding Promotion of Dialogue with Shareholders and...

Metrical Inc

Disclosure of Management Strategies with Cost of Capital and Stock Price in Mind Is Still Limited

I would like to discuss the issues on "Status of Companies' Responses and Follow-up on Responses to Achieve Management Conscious of Cost of...

Metrical Inc

At the Root of the Diversity Issue Is Traditional Familism in Society and the Workplace

I would like to discuss the issues on the July 21 Nikkei article, "Breaking Down the Barriers for Working Women in the Workplace to Encourage Men...

Metrical Inc

Nowhere to Run to Baby, Nowhere to Hide! Part 1

Given the short-term oversold conditions in the Nikkei and Topix, we would take some profits on any shorts in anticipation of a bounce and get...

Rikki Malik