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>Although unavoidable under the provisions of Broadcasting Act, the fact that the right to receive dividends as interest-bearing securities was inhibited was problematic in terms of fairness with other shareholders.</li>
<li>NTV Holdings, which has ignored this issue, changes its policy, which is a positive impact of "TSE's request," but NTV's seriousness can be measured by whether it raises its ROE.</li>
<li>If the intention is to leave cross-shareholdings intact and attract overseas investor purchases through some share repurchases, there would be little prospect of a serious increase in ROE.</li>
</ul>


Although unavoidable under the provisions of Broadcasting Act, the fact that the right to receive dividends as interest-bearing securities was inhibited was problematic in terms of fairness with other shareholders.
NTV Holdings, which has ignored this issue, changes its policy, which is a positive impact of "TSE's request," but NTV's seriousness can be measured by whether it raises its ROE.
If the intention is to leave cross-shareholdings intact and attract overseas investor purchases through some share repurchases, there would be little prospect of a serious increase in ROE.


NTV's Change of Policy Is a Positive Effect Of TSE's Request, But Its Seriousness Will Be Tested Now

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Japan Petroleum Exploration / Event-Driven

<ul>
<li>Japanese companies are buying back more stock than ever before, and recent moves by the TSE and METI are effectively pushing for more.</li>
<li>The new goal is to lift PBR and ROE. The easiest way to lift ROE is reduce E. Low-PBR Cos with excess assets and cross-holdings (outbound and inbound) are targets.</li>
<li>In this insight I look at several possible rankings for potential large buyback targets.</li>
</ul>


Japanese companies are buying back more stock than ever before, and recent moves by the TSE and METI are effectively pushing for more.
The new goal is to lift PBR and ROE. The easiest way to lift ROE is reduce E. Low-PBR Cos with excess assets and cross-holdings (outbound and inbound) are targets.
In this insight I look at several possible rankings for potential large buyback targets.


JAPAN GOVERNANCE CHANGES II - Who Could Surprise on Buybacks? Quant Rankings

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Now that dry January has ended it is time to pop the champagne corks and celebrate the Japanese stock market performance. </li>
<li>Much credit goes to the TSE, shaking things up by calling out companies indifferent to their cost of capital and stock prices</li>
<li>We highlight why NTV and Socionext are two of the top performers so far this year</li>
</ul>


Now that dry January has ended it is time to pop the champagne corks and celebrate the Japanese stock market performance. 
Much credit goes to the TSE, shaking things up by calling out companies indifferent to their cost of capital and stock prices
We highlight why NTV and Socionext are two of the top performers so far this year


Japan Weekly | Japanese Investors Pop Champagne as Stocks Soar.

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 ACWI ETF / Technical Analysis

<ul>
<li>We see global equities (MSCI ACWI) going through a pause/pullback amid short-term breakouts in the U.S. dollar (DXY) and global sovereign 10-year yields.</li>
<li>A rising DXY and climbing yields is a near-term headwind, and we could continue to see more choppy price action in the weeks ahead.</li>
<li>With that said, as long as the DXY remains below $106, the 10-year Treasury yield remains below 4.35%, and ACWI-US is above $98, we would view pullbacks as buying opportunities.</li>
</ul>


We see global equities (MSCI ACWI) going through a pause/pullback amid short-term breakouts in the U.S. dollar (DXY) and global sovereign 10-year yields.
A rising DXY and climbing yields is a near-term headwind, and we could continue to see more choppy price action in the weeks ahead.
With that said, as long as the DXY remains below $106, the 10-year Treasury yield remains below 4.35%, and ACWI-US is above $98, we would view pullbacks as buying opportunities.


Pause/Pullback Underway; Downgrading Europe and Mexico; Buys in Services, Tech, Comm, Healthcare

Equity Capital Markets

Recruit Holdings / Equity Capital Markets

Today (30 Nov 2020) after the close, <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a><a href="https://recruit-holdings.co.jp/ir/ir_news/20201130_01.html" target="_blank" rel="noopener">announced</a> (Japanese only so far) a selldown of shares by eight different companies with a total share sale amounting to 86.111mm shares (plus greenshoe) for an ex-ante expected Offering size of ¥416.8bn or US$4.0 billion. This has happened twice before since IPO as corporate shareholders who owned most of Recruit prior to its IPO sell shares down. Like in large secondary share sales conducted in previous years, there is a <a href="https://recruit-holdings.co.jp/ir/ir_news/20201130_02.html" target="_blank" rel="noopener">buyback</a> (Japanese only so far) attached where Recruit will buy back a non-negligible portion of the offering, and having learned from the mini-debacle in 2016, in 2019 the company started its buyback post-offering. This year it is the same.There are, as always, interesting investor placement dynamics and buyback and index implications, discussed below, along with the history of the prior events.The real difference this year is that pricing happens speedily. This week. Probably on Wednesday. That's fast. The last two were 9 and 13 days after announcement.

Today (30 Nov 2020) after the close, Recruit Holdings (6098 JP)announced (Japanese only so far) a selldown of shares by eight different companies with a total share sale amounting to 86.111mm shares (plus greenshoe) for an ex-ante expected Offering size of ¥416.8bn or US$4.0 billion. This has happened twice before since IPO as corporate shareholders who owned most of Recruit prior to its IPO sell shares down. Like in large secondary share sales conducted in previous years, there is a buyback (Japanese only so far) attached where Recruit will buy back a non-negligible portion of the offering, and having learned from the mini-debacle in 2016, in 2019 the company started its buyback post-offering. This year it is the same.There are, as always, interesting investor placement dynamics and buyback and index implications, discussed below, along with the history of the prior events.The real difference this year is that pricing happens speedily. This week. Probably on Wednesday. That's fast. The last two were 9 and 13 days after announcement. 

A Speedy Recruit Offering (And Slower Buyback)

Japan

Nippon Television Holdings Inc is a commercial television broadcaster which provides programs through a national network system.  The Company is expanding into digital satellite broadcasting. Nippon Television also operates publication and entertainment business such as concerts and exhibitions. The Company is affiliated with Yomiuri Shimbun.

Nippon Television (9404 JP)

NTV's Change of Policy Is a Positive Effect Of TSE's Request, But Its Seriousness Will Be Tested Now

I would like to discuss the issues on the February 1 Nikkei article, "NTV Holdings to Pay Dividends to Foreign Shareholders Not Included in...

Metrical Inc

JAPAN GOVERNANCE CHANGES II - Who Could Surprise on Buybacks? Quant Rankings

JAPAN GOVERNANCE: There is a buyback story coming. It will be big. Bigger than the past year or two, and it will continue. What to buy?

Travis Lundy

Japan Weekly | Japanese Investors Pop Champagne as Stocks Soar.

Japanese stock market celebrates strong performance in January, thanks to TSE's focus on companies' cost of capital and stock prices. NTV and...

Mark Chadwick

Pause/Pullback Underway; Downgrading Europe and Mexico; Buys in Services, Tech, Comm, Healthcare

Pause/pullback underway in $ACWI, but as long as the $DXY remains below $106, the 10-year Treasury yield remains below 4.35%, and $ACWI is above...

Vermilion Research

A Speedy Recruit Offering (And Slower Buyback)

A Large and Speedily-Executed Secondary Offering by Recruit may test investor appetite. The reaction could be sharp in the next two days, leading...

Travis Lundy