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>Since the median P/B of companies listed on TSE is 1.0, Japanese companies will continue to attract the keen attention of activist investors around the world.</li>
<li>Many Japanese managers can rest on their laurels with share prices that don't command premium because of silent shareholders like cross-holding and BoJ that little care about share price performance.</li>
<li>There are many companies that publish management strategies that only give a sense of doing, and the stock price does not fall but keeps not significantly outperforming.</li>
</ul>


Since the median P/B of companies listed on TSE is 1.0, Japanese companies will continue to attract the keen attention of activist investors around the world.
Many Japanese managers can rest on their laurels with share prices that don't command premium because of silent shareholders like cross-holding and BoJ that little care about share price performance.
There are many companies that publish management strategies that only give a sense of doing, and the stock price does not fall but keeps not significantly outperforming.


A Company Invested by an Activist Should Understand that It’s Not Fully Exploiting Its Potential

<ul>
<li>This fiscal year, total dividends paid haven't increased compared to recovering total net profit. Consequently, the dividend payout ratio has fallen to the low 30% level, normal level for FY2020.</li>
<li>The correlations of market capitalization to net profit and to dividends paid both declined from those of the past 10 years, indicating lack of confidence in profits in year ahead.</li>
<li>Simply raising the dividend has limited effect on stock price increases. Given that the dividend payout ratio has declined, companies are required to explain how they are using their cash.</li>
</ul>


This fiscal year, total dividends paid haven't increased compared to recovering total net profit. Consequently, the dividend payout ratio has fallen to the low 30% level, normal level for FY2020.
The correlations of market capitalization to net profit and to dividends paid both declined from those of the past 10 years, indicating lack of confidence in profits in year ahead.
Simply raising the dividend has limited effect on stock price increases. Given that the dividend payout ratio has declined, companies are required to explain how they are using their cash.


More Effective for a Company to Show Background when It Raises Its Dividend Outlook

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI China ETF / Technical Analysis

<ul>
<li>We remain neutral on global equities (MSCI ACWI), we believe upside remains limited with the MSCI ACWI (ACWI-US), S&amp;P 500, and several European indexes still below major resistance.</li>
<li>We continue to expect rangebound price action in the months ahead on the MSCI ACWI.</li>
<li>And, rangebound price action could very well be the theme for all of 2023 (with resistance at $93 and support at $75-77 on ACWI-US)</li>
</ul>


We remain neutral on global equities (MSCI ACWI), we believe upside remains limited with the MSCI ACWI (ACWI-US), S&amp;P 500, and several European indexes still below major resistance.
We continue to expect rangebound price action in the months ahead on the MSCI ACWI.
And, rangebound price action could very well be the theme for all of 2023 (with resistance at $93 and support at $75-77 on ACWI-US)


Hang Seng and MSCI China Bottoming -- Add; Europe Still Leading; Shift From U.S. To Non-U.S.

<ul>
<li>Although Fujitec's corporate governance framework has improved in places, the Statutory Auditor and Nominating Committee aren’t functioning, and the Board of Directors with a majority of independent directors isn't functioning.</li>
<li>METI survey shows that 20% of independent directors are friends of CEO, a glimpse of how companies expect independent outside directors to play a role in endorsing executive management policies.</li>
<li>With several revisions of Corporate Governance Code, companies have ostensibly made steady progress in corporate governance efforts. However, whether this has been accompanied by substance varies from company to company.</li>
</ul>


Although Fujitec's corporate governance framework has improved in places, the Statutory Auditor and Nominating Committee aren’t functioning, and the Board of Directors with a majority of independent directors isn't functioning.
METI survey shows that 20% of independent directors are friends of CEO, a glimpse of how companies expect independent outside directors to play a role in endorsing executive management policies.
With several revisions of Corporate Governance Code, companies have ostensibly made steady progress in corporate governance efforts. However, whether this has been accompanied by substance varies from company to company.


Time to Move Forward to Corporate Governance 2.0, Where the Substance Will Be Questioned

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.</li>
<li>This insight is a follow-up to <a href="https://www.smartkarma.com/insights/topix-inclusions-who-is-ready-dec-2022" target="_blank" data-smartkarma-citation="insights:85784" rel="noopener">TOPIX Inclusions: Who Is Ready (Dec 2022)</a>. </li>
<li>Our latest top pick for TOPIX Inclusion pre-events is <a href="https://www.smartkarma.com/entities/artspark-holdings-inc" target="_blank" data-smartkarma-citation="entities:20774:1" rel="noopener">Artspark Holdings (3663 JP)</a>. </li>
</ul>


Quiddity's "Who is Ready" series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
This insight is a follow-up to TOPIX Inclusions: Who Is Ready (Dec 2022). 
Our latest top pick for TOPIX Inclusion pre-events is Artspark Holdings (3663 JP). 


TOPIX Inclusions: Who Is Ready (Jan 2023)

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)

A Company Invested by an Activist Should Understand that It’s Not Fully Exploiting Its Potential

I would like to discuss the issues on the Nikkei article, " EY Japan Provides Comprehensive Support for Shareholder Relations, Encourages...

Metrical Inc

More Effective for a Company to Show Background when It Raises Its Dividend Outlook

I would like to discuss the issues on the Nikkei article, "Listed companies, 250 companies revise dividend outlook upward for FY3/2023."

Metrical Inc

Hang Seng and MSCI China Bottoming -- Add; Europe Still Leading; Shift From U.S. To Non-U.S.

We remain neutral on global equities $ACWI and expect rangebound price action in the months (possibly year) ahead. Specific $ACWI trading range we...

Vermilion Research

Time to Move Forward to Corporate Governance 2.0, Where the Substance Will Be Questioned

I would like to discuss the issues on the Nikkei article, "Oasis requests extraordinary general meeting for Fujitec, proposes 7 outside directors."

Metrical Inc

TOPIX Inclusions: Who Is Ready (Jan 2023)

Out of the 1,600+ TSE-listed names that are not part of the Prime market, around 100+ can satisfy most of the key conditions for a prime market...

Janaghan Jeyakumar, CFA