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>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

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

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> and <a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a> listed over the last couple of months and the stocks will be added to various indices over the year.</li>
<li>First up, <a href="https://www.smartkarma.com/entities/rakuten-bank-ltd" target="_blank" data-smartkarma-citation="entities:35638:1" rel="noopener">Rakuten Bank (5838 JP)</a> will be added to the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX)</a> at the close on 30 May.</li>
<li>Then both stocks will be added to other global indices between August and December bringing in passive flows and helping support the stock.</li>
</ul>



SBI Sumishin Net Bank (7163 JP) and Rakuten Bank (5838 JP) listed over the last couple of months and the stocks will be added to various indices over the year.
First up, Rakuten Bank (5838 JP) will be added to the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) at the close on 30 May.
Then both stocks will be added to other global indices between August and December bringing in passive flows and helping support the stock.


Rakuten Bank & SBI Sumishin Net Bank: Upcoming Passive Flow

<ul>
<li>The question is whether companies can achieve results by increasing investment to secure and train human resources who can contribute to transitioning to a business that produces high value-added products.</li>
<li>Regarding the disclosure of human capital, many issues remain, such as the lack of unified definition of the required items and the inability to use this data as comparable data.</li>
<li>Percentage of women in managerial positions is more serious. The lack of on-the-job training for women is an on-going issue that makes the path to future managerial positions more difficult.</li>
</ul>


The question is whether companies can achieve results by increasing investment to secure and train human resources who can contribute to transitioning to a business that produces high value-added products.
Regarding the disclosure of human capital, many issues remain, such as the lack of unified definition of the required items and the inability to use this data as comparable data.
Percentage of women in managerial positions is more serious. The lack of on-the-job training for women is an on-going issue that makes the path to future managerial positions more difficult.


Need to Increase Human Capital Investment as Soon as Possible to Move to High Value-Added Businesses

<ul>
<li>Recognizing the cost of capital and return on capital is an important factor in determining business strategy, but not many companies disclose their cost of capital and specific management vision.</li>
<li>In order to increase the effectiveness of disclosure of the cost of capital, we should consider changing the Corporate Governance Code to require disclosure by prime market listed companies.</li>
<li>JPX Prime 150 Index, which is based on "equity spreads," has begun to be calculated, but it has't attracted much attention since its performance doesn't differ from that of TOPIX.</li>
</ul>


Recognizing the cost of capital and return on capital is an important factor in determining business strategy, but not many companies disclose their cost of capital and specific management vision.
In order to increase the effectiveness of disclosure of the cost of capital, we should consider changing the Corporate Governance Code to require disclosure by prime market listed companies.
JPX Prime 150 Index, which is based on "equity spreads," has begun to be calculated, but it has't attracted much attention since its performance doesn't differ from that of TOPIX.


Ways Should Be Explored to Make Companies More Effective in Disclosing Their Cost of Capital

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari (4385 JP)</a>, <a href="https://www.smartkarma.com/entities/lasertec-corp" target="_blank" data-smartkarma-citation="entities:4126:1" rel="noopener">Lasertec (6920 JP)</a> and <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori (9843 JP)</a> will replace <a href="https://www.smartkarma.com/entities/nippon-sheet-glass-co-ltd" target="_blank" data-smartkarma-citation="entities:9013:1" rel="noopener">Nippon Sheet Glass (5202 JP)</a>, <a href="https://www.smartkarma.com/entities/mitsui-e-s-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:2402:1" rel="noopener">Mitsui E&amp;S (7003 JP)</a> and <a href="https://www.smartkarma.com/entities/matsui-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:6553:1" rel="noopener">Matsui Securities (8628 JP)</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>.</li>
<li>As expected, <a href="https://www.smartkarma.com/entities/nitori-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:20386:1" rel="noopener">Nitori Holdings (9843 JP)</a> will be added at half the planned PAF since the trading value is low compared to the expected index weight.</li>
<li>Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.</li>
</ul>



Mercari (4385 JP), Lasertec (6920 JP) and Nitori (9843 JP) will replace Nippon Sheet Glass (5202 JP), Mitsui E&amp;S (7003 JP) and Matsui Securities (8628 JP) in the Nikkei 225.
As expected, Nitori Holdings (9843 JP) will be added at half the planned PAF since the trading value is low compared to the expected index weight.
Passive trackers need to buy between 1-17 days of ADV on the adds while selling between 1.2-16.5 days of ADV on the deletes. There is a big funding trade too.


Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

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)

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

Rakuten Bank & SBI Sumishin Net Bank: Upcoming Passive Flow

Rakuten Bank has run up a lot since the Insight was published. There is still more passive buying to come and investors could exit the stock...

Brian Freitas

Need to Increase Human Capital Investment as Soon as Possible to Move to High Value-Added Businesses

I would like to discuss the September 3 Nikkei article, "Human Capital as a Measure of Growth Potential: Scoring the "First Year" of Reporting...

Metrical Inc

Ways Should Be Explored to Make Companies More Effective in Disclosing Their Cost of Capital

I would like to discuss the issues on the August 30 Nikkei Shimbun article, "Top 30 Companies in "ROE > Cost of Capital" Ranking: ZOZO is at the Top."

Metrical Inc

Nikkei 225 Index Rebalance: Mercari, Lasertec, Nitori IN; Nippon Glass, Mitsui E&S, Matsui Sec OUT

The adds are broadly flat since announcement of the changes. The deletes are higher and short interest has continued to increase. The stocks with...

Brian Freitas