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 reason for the limited increase in GPIF's ESG investments must be thought of separately in terms of GPIF-specific factors and the overall trend in ESG investing.</li>
<li>Because investors consider which combination of managers in their asset allocation will work best for the overall portfolio, there are factors that cannot be determined by individual ESG investing alone.</li>
<li>ESG investing has been expanding, but with so many ESG indices and vendors in disarray, some problems are pointed out. It's important to review the effectiveness of the ESG indices.</li>
</ul>


The reason for the limited increase in GPIF's ESG investments must be thought of separately in terms of GPIF-specific factors and the overall trend in ESG investing.
Because investors consider which combination of managers in their asset allocation will work best for the overall portfolio, there are factors that cannot be determined by individual ESG investing alone.
ESG investing has been expanding, but with so many ESG indices and vendors in disarray, some problems are pointed out. It's important to review the effectiveness of the ESG indices.


It Is Very Important to Review ESG Investing Before the Risks Become Evident

<ul>
<li>The proposal is to reduce the workload on companies by eliminating the requirement for quarterly disclosure in the annual securities report and instead submitting the financial results to the TSE.</li>
<li>Future discussions will focus on how much of the new sustainability disclosures. Listed companies are diverse, and while a few companies are proactive, many are backward-looking in their efforts.</li>
<li>In conjunction with the quarterly disclosure, the time has come to discuss how listed companies should be. 300 companies are allowed to list without meeting the prime market listing criteria.</li>
</ul>


The proposal is to reduce the workload on companies by eliminating the requirement for quarterly disclosure in the annual securities report and instead submitting the financial results to the TSE.
Future discussions will focus on how much of the new sustainability disclosures. Listed companies are diverse, and while a few companies are proactive, many are backward-looking in their efforts.
In conjunction with the quarterly disclosure, the time has come to discuss how listed companies should be. 300 companies are allowed to list without meeting the prime market listing criteria.


The State of Listed Companies Should Be Discussed Together with Discussion of Quarterly Disclosure

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 Global Consumer Disc / Technical Analysis

<ul>
<li>We are seeing some positive signals that suggest the lows for this bear market may have already been established, or at the very least, that downside is limited from here.</li>
<li>Still, YTD downtrends remain intact on the global MSCI equity indexes, and we need to see reversals of their downtrends in order to get more constructive at the index level.</li>
<li>Cyclical Growth Sectors continue to gain momentum and we are upgrading the MSCI ACWI Technology, Consumer Discretionary, and Communication Services Sectors from underweight to market weight. Add exposure.</li>
</ul>


We are seeing some positive signals that suggest the lows for this bear market may have already been established, or at the very least, that downside is limited from here.
Still, YTD downtrends remain intact on the global MSCI equity indexes, and we need to see reversals of their downtrends in order to get more constructive at the index level.
Cyclical Growth Sectors continue to gain momentum and we are upgrading the MSCI ACWI Technology, Consumer Discretionary, and Communication Services Sectors from underweight to market weight. Add exposure.


Positive Signals; Growth Sectors Gaining Momentum; Buy Ideas Within Global Growth Sectors

<ul>
<li>It can be said that companies that do not specify cash allocation and only execute shareholder return, thus encouraging shareholders to find and invest in reinvestment targets on their own.</li>
<li>Since the stock valuations of companies as a whole haven't increased, investment capital has gone to a few companies with high profitability, raising gap between profitability and valuations among companies. </li>
<li>If the information asymmetry between management and investors could be bridged, even changes in the capital structure could have an impact on stock prices.</li>
</ul>


It can be said that companies that do not specify cash allocation and only execute shareholder return, thus encouraging shareholders to find and invest in reinvestment targets on their own.
Since the stock valuations of companies as a whole haven't increased, investment capital has gone to a few companies with high profitability, raising gap between profitability and valuations among companies. 
If the information asymmetry between management and investors could be bridged, even changes in the capital structure could have an impact on stock prices.


Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies

<ul>
<li>I believe the change in TOPIX float calculation criteria had significant impact on the pace of reductions last year. It's necessary to pay attention to whether the pace will continue.</li>
<li>"Deemed shares held" are shares contributed to the retirement benefit trust, and the company retains the right to direct the voting rights. Remember that cross-held shares exist here as well.</li>
<li>I would like listed companies to settle the issue of policy shareholdings as soon as possible and focus on how to raise profit margins, which is the biggest issue.</li>
</ul>


I believe the change in TOPIX float calculation criteria had significant impact on the pace of reductions last year. It's necessary to pay attention to whether the pace will continue.
"Deemed shares held" are shares contributed to the retirement benefit trust, and the company retains the right to direct the voting rights. Remember that cross-held shares exist here as well.
I would like listed companies to settle the issue of policy shareholdings as soon as possible and focus on how to raise profit margins, which is the biggest issue.


Don't Forget to Check for Deemed Shares Even if a Company Have Reduced Its Policy Shareholdings

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)

It Is Very Important to Review ESG Investing Before the Risks Become Evident

I would like to discuss the issues on the Nikkei article "GPIF's increase in ESG index investments in the previous fiscal year was limited."

Metrical Inc

The State of Listed Companies Should Be Discussed Together with Discussion of Quarterly Disclosure

I would like to continue to discuss the issue on the quarterly disclosure, as the Nikkei published an article titled, "Quarterly Disclosures to be...

Metrical Inc

Positive Signals; Growth Sectors Gaining Momentum; Buy Ideas Within Global Growth Sectors

Starting to see positive signals that suggest downside is limited from here. Still, we need to see reversals of YTD downtrends on $ACWI $ACWX $EFA...

Vermilion Research

Simply Returning Profits to Shareholders Will Increase Gap in Valuations Among Companies

I will discuss the issue in which Nikkei's tone changed from somewhat one-sided affirmation of share buybacks to suggestion that companies should...

Metrical Inc

Don't Forget to Check for Deemed Shares Even if a Company Have Reduced Its Policy Shareholdings

I would like to discuss about the issues raised on the Nikkei article, "Disclosure of policy shareholdings prior to AGMs expands to 30%."

Metrical Inc