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>There is the problem that a wage gap exists between men and women even among regular employees, and that the percentage of non-regular workers is very high among women.</li>
<li>Issues to be addressed include the creation of a social infrastructure in which workers don’t have to leave jobs due to childbirth or child-rearing, and fair wages for non-regular workers.</li>
<li>Mandatory disclosure is an important step. Managers should also think of employees as partners in creating new value, rather than simply as labor, which will help to eliminate this issue.</li>
</ul>


There is the problem that a wage gap exists between men and women even among regular employees, and that the percentage of non-regular workers is very high among women.
Issues to be addressed include the creation of a social infrastructure in which workers don’t have to leave jobs due to childbirth or child-rearing, and fair wages for non-regular workers.
Mandatory disclosure is an important step. Managers should also think of employees as partners in creating new value, rather than simply as labor, which will help to eliminate this issue.


Mandatory Disclosure of Gender Wage Differentials Is Still a First Step

<ul>
<li>In the area of politics, where there is a noticeable lag, there is a system in the electoral system that actually discourages aspiring politicians from becoming politicians.</li>
<li>The social structure of male dominance is nothing more than maintenance of that structure by groups with vested interests, and risk exists that sensitivity to new values will be dulled.</li>
<li>Without the forces at work to change existing social structures, the gender gap index isn’t expected to change much next year, but so far we don't see such forces now.</li>
</ul>


In the area of politics, where there is a noticeable lag, there is a system in the electoral system that actually discourages aspiring politicians from becoming politicians.
The social structure of male dominance is nothing more than maintenance of that structure by groups with vested interests, and risk exists that sensitivity to new values will be dulled.
Without the forces at work to change existing social structures, the gender gap index isn’t expected to change much next year, but so far we don't see such forces now.


Japan's Gender Gap Index Remains Low. Power to Change the Existing Structure Is Still Invisible.

<ul>
<li>As discussed in my previous article, when the % of foreign shareholders increases, companies tend not to bring up the continuation of takeover defense measures at shareholder meetings.</li>
<li>The threshold level, so to speak, of the % of foreign shareholders that determines whether or not to continue takeover defense measures is estimated to be in the 30% range.</li>
<li>If other domestic institutional investors follow, threshold level will be lowered and lead to a more tense corporate management, which will have a positive effect on the board of directors.</li>
</ul>


As discussed in my previous article, when the % of foreign shareholders increases, companies tend not to bring up the continuation of takeover defense measures at shareholder meetings.
The threshold level, so to speak, of the % of foreign shareholders that determines whether or not to continue takeover defense measures is estimated to be in the 30% range.
If other domestic institutional investors follow, threshold level will be lowered and lead to a more tense corporate management, which will have a positive effect on the board of directors.


Voting Rights that Fulfill Fiduciary Duty Are a Key for Tense Corporate Management Practices

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>There are 36 adds and 34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. Some of the changes are interesting.</li>
<li>Based on the adds, deletes and capping changes, we estimate one way turnover of 4.75% and a two-way trade of JPY 444.45bn (US$3.3bn).</li>
<li>
<a href="https://www.smartkarma.com/entities/oriental-land-co-ltd" target="_blank" data-smartkarma-citation="entities:13517:1" rel="noopener">Oriental Land (4661 JP)</a> is a delete from the JPX Nikkei 400 Index but a high probability inclusion to the <a href="https://www.smartkarma.com/entities/nikkei-225" target="_blank" data-smartkarma-citation="entities:22909:1" rel="noopener">Nikkei 225 (NKY INDEX)</a> at the September rebalance.</li>
</ul>


There are 36 adds and 34 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. Some of the changes are interesting.
Based on the adds, deletes and capping changes, we estimate one way turnover of 4.75% and a two-way trade of JPY 444.45bn (US$3.3bn).

Oriental Land (4661 JP) is a delete from the JPX Nikkei 400 Index but a high probability inclusion to the Nikkei 225 (NKY INDEX) at the September rebalance.


JPX Nikkei 400 Index Rebalance: Some Biggish Impact Stocks

<ul>
<li>Of course, When the BOJ's ETF purchases were active, there were concerns about their impact on stock price formation, but now the impact is much smaller.</li>
<li>However, the BOJ has a presence in listed companies as a silent major shareholder, it is highly questionable whether its voting rights are being properly exercised.</li>
<li>While the silent major shareholder exists, overseas investors have played major role in enhancing corporate governance. In addition to cross-shareholding structures, they also have to contend with the silent shareholder.</li>
</ul>


Of course, When the BOJ's ETF purchases were active, there were concerns about their impact on stock price formation, but now the impact is much smaller.
However, the BOJ has a presence in listed companies as a silent major shareholder, it is highly questionable whether its voting rights are being properly exercised.
While the silent major shareholder exists, overseas investors have played major role in enhancing corporate governance. In addition to cross-shareholding structures, they also have to contend with the silent shareholder.


Share Buybacks Exceed BOJ's ETF Purchases, but BOJ's Presence Is Significant in Another Aspect

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)

Mandatory Disclosure of Gender Wage Differentials Is Still a First Step

I would like to discuss the issue on the Nikkei article "Change the Workplace by Disclosing the Gender Wage Difference."

Metrical Inc

Japan's Gender Gap Index Remains Low. Power to Change the Existing Structure Is Still Invisible.

I would like to discuss the issues on the Nikkei article "Japan's Gender Equality Index Ranks 116th, No Progress in Improvements in Politics and...

Metrical Inc

Voting Rights that Fulfill Fiduciary Duty Are a Key for Tense Corporate Management Practices

I would like to discuss the issues on the Nikkei article "approval rate for takeover defense measures declined at companies that proposed such...

Metrical Inc

JPX Nikkei 400 Index Rebalance: Some Biggish Impact Stocks

There are 36 adds & 34 deletes for the JPX Nikkei 400 Index at the August rebalance leading to an estimated one way turnover of 4.75% and a two-way...

Brian Freitas

Mandatory Disclosure of Gender Wage Differentials Is Still a First Step

I would like to discuss the issue on the Nikkei article "Change the Workplace by Disclosing the Gender Wage Difference."

Metrical Inc

Japan's Gender Gap Index Remains Low. Power to Change the Existing Structure Is Still Invisible.

I would like to discuss the issues on the Nikkei article "Japan's Gender Equality Index Ranks 116th, No Progress in Improvements in Politics and...

Metrical Inc

Voting Rights that Fulfill Fiduciary Duty Are a Key for Tense Corporate Management Practices

I would like to discuss the issues on the Nikkei article "approval rate for takeover defense measures declined at companies that proposed such...

Metrical Inc

JPX Nikkei 400 Index Rebalance: Some Biggish Impact Stocks

There are 36 adds & 34 deletes for the JPX Nikkei 400 Index at the August rebalance leading to an estimated one way turnover of 4.75% and a two-way...

Brian Freitas

Share Buybacks Exceed BOJ's ETF Purchases, but BOJ's Presence Is Significant in Another Aspect

I would like to discuss the Nikkei's article reporting that "while the Bank of Japan's ETF purchases of shares have declined significantly, share...

Metrical Inc