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.

Higher Valuations Require Increased Return on Capital to Attract the Attention of Overseas Investors

The Key to Higher ROE Is Higher Profit Margins and Faster Efforts by Smaller Companies

For the Time Being, Stronger Shareholder Returns Are an Incentive for the Stock Price to Rise

The Key Is to Achieve Sustainable Growth Through Continuous Business Portfolio Review

Cash on Hand Has Built up to a Level Where Small Shareholder Returns Are No Longer Sufficient

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>While the move to strengthen shareholder returns is a step forward among companies, there is a concern about whether they are using their cash to invest fully in future growth.</li>
<li>Interestingly, while rising foreign shareholdings are driving companies that can't spend their cash reserves effectively to repurchase shares, overseas investors are overselling Japanese stocks in the first half of FY2024.</li>
<li>There has been focus on measures to reduce the denominator of ROE, but the current pace of reduction of policy shareholdings and cash reserves isn't sufficient to significantly boost ROE.</li>
</ul>


While the move to strengthen shareholder returns is a step forward among companies, there is a concern about whether they are using their cash to invest fully in future growth.
Interestingly, while rising foreign shareholdings are driving companies that can't spend their cash reserves effectively to repurchase shares, overseas investors are overselling Japanese stocks in the first half of FY2024.
There has been focus on measures to reduce the denominator of ROE, but the current pace of reduction of policy shareholdings and cash reserves isn't sufficient to significantly boost ROE.


Overseas Investors' Net Sale of Japanese Stocks Imply Priority of Profit Growth over Share Buybacks

TSE Tokyo Price Index TOPIX

Overseas Investors' Net Sale of Japanese Stocks Imply Priority of Profit Growth over Share Buybacks