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>The contents of quarterly reports are the same as those of financial summaries. Therefore, it’s in order that the quarterly reports for 1Q /3Q be unified with the financial summaries.</li>
<li>The major difference between quarterly securities reports and financial summaries is the significance of legal responsibility. By requiring partial review by auditors, TSE will ensure the reliability of financial summaries.</li>
<li>Meanwhile, TSE must continue to enhance the ethics of company managers and require companies to eliminate malicious misreporting. Unification of quarterly reports would further increase the role of the TSE.</li>
</ul>


The contents of quarterly reports are the same as those of financial summaries. Therefore, it’s in order that the quarterly reports for 1Q /3Q be unified with the financial summaries.
The major difference between quarterly securities reports and financial summaries is the significance of legal responsibility. By requiring partial review by auditors, TSE will ensure the reliability of financial summaries.
Meanwhile, TSE must continue to enhance the ethics of company managers and require companies to eliminate malicious misreporting. Unification of quarterly reports would further increase the role of the TSE.


Unification of Quarterly Reports Will Further Increase the Role of TSE

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>Risk reward favours this shift in allocation between these markets.</li>
<li>Japan will suffer from base effects on economic data and earnings this year as JPY move reverses.</li>
<li>Year end Positioning could provide attractive entry points for both legs.</li>
</ul>


Risk reward favours this shift in allocation between these markets.
Japan will suffer from base effects on economic data and earnings this year as JPY move reverses.
Year end Positioning could provide attractive entry points for both legs.


2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 1

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & 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>One of our TOPIX Inclusion Pre-event names <a href="https://www.smartkarma.com/entities/visional-inc" target="_blank" data-smartkarma-citation="entities:32977:1" rel="noopener">Visional (4194 JP)</a> confirmed it has received approval to move to the Prime Market in December 2023.</li>
<li>Currently, we are expecting one TOPIX Inclusion at the end of December 2023 and two more at the end of January 2024 (including Visional). </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.
One of our TOPIX Inclusion Pre-event names Visional (4194 JP) confirmed it has received approval to move to the Prime Market in December 2023.
Currently, we are expecting one TOPIX Inclusion at the end of December 2023 and two more at the end of January 2024 (including Visional). 


TOPIX Inclusions: Who Is Ready (Dec 2023)

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

Index Rebalance

<ul>
<li>There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.</li>
<li>There are a lot of implementations this week, with <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI 200</a> and <a href="https://www.smartkarma.com/entities/kosdaq-150-index" target="_blank" data-smartkarma-citation="entities:31077:1" rel="noopener">KOSDAQ 150</a> on Thursday and then others across a bunch of countries on Friday.</li>
<li>There were big inflows to <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong (2800 HK)</a> during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.</li>
</ul>


There were a lot of rebalance implementations in China on Friday, plus a few upcoming index changes that were announced during the week.
There are a lot of implementations this week, with KOSPI 200 and KOSDAQ 150 on Thursday and then others across a bunch of countries on Friday.
There were big inflows to Tracker Fund of Hong Kong (2800 HK) during the week taking units outstanding to a new high. ETF inflows continue even as the market drops.


Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Group (4755 JP)</a> is looking to sell 25.5m shares of <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> via a secondary offering at a discount of between 8.7%-12.3%.</li>
<li>The offering will raise a maximum of US$433m and <a href="https://www.smartkarma.com/entities/rakuten-group-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Group (4755 JP)</a> will use the funds to reduce its interest-bearing debt by the early repayment of its bonds.</li>
<li>There will be limited passive buying at the time of settlement of the stock but there is an index inclusion coming up that will result in passives buying.</li>
</ul>



Rakuten Group (4755 JP) is looking to sell 25.5m shares of Rakuten Bank (5838 JP) via a secondary offering at a discount of between 8.7%-12.3%.
The offering will raise a maximum of US$433m and Rakuten Group (4755 JP) will use the funds to reduce its interest-bearing debt by the early repayment of its bonds.
There will be limited passive buying at the time of settlement of the stock but there is an index inclusion coming up that will result in passives buying.


Rakuten Bank (5838 JP) Placement: Index Inclusion Will Absorb Some Stock

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)

Unification of Quarterly Reports Will Further Increase the Role of TSE

I would like to discuss the November 16th Nikkei Shimbun article, "Quarterly Reports to be Abolished in April 2024; Amendment to the Financial...

Metrical Inc

2024 High Conviction Idea: The Case for a Rotation Out of Japan into Hong Kong - Part 1

A correct market allocation over stock specific allocation will define a successful year in 2024. Changing economic dynamics will mean the Japanese...

Rikki Malik

TOPIX Inclusions: Who Is Ready (Dec 2023)

There are currently 68 names that satisfy all 6 key Segment Transfer requirements based on current data. Another 67 names can satisfy 5 out of 6...

Janaghan Jeyakumar, CFA

Index Rebalance & ETF Flow Recap: NKY, TW Div+, ASX200, NZX50, Mom30, Top10EW, MVW, Rakuten Bank

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Rakuten Bank (5838 JP) Placement: Index Inclusion Will Absorb Some Stock

Rakuten is looking to raise up to US$433m by selling 14.6% of Rakuten Bank. Rakuten Bank has an index inclusion coming up and there will be passive...

Brian Freitas