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>Only a while ago, there was debate in ESG Investing about "how effective ESG factors are in performance," and rather skeptical viewpoint prevailed among investors. Where have these debates gone?</li>
<li>Since there is serious shortage of human resources of ESG analysts, the FSA is expected to take a certain amount of time to monitor the systems of investment management companies.</li>
<li>FSA will strengthen its monitoring ESG wash to ensure that there are no misstatements in the reports as listed companies will be required to include sustainability in their securities reports.</li>
</ul>


Only a while ago, there was debate in ESG Investing about "how effective ESG factors are in performance," and rather skeptical viewpoint prevailed among investors. Where have these debates gone?
Since there is serious shortage of human resources of ESG analysts, the FSA is expected to take a certain amount of time to monitor the systems of investment management companies.
FSA will strengthen its monitoring ESG wash to ensure that there are no misstatements in the reports as listed companies will be required to include sustainability in their securities reports.


Tighter ESG-Wash Monitoring Will Follow the New Securities Report Disclosure Rule in in 2 Years?

<ul>
<li>I would like to discuss about the Nikkei article, "Shareholder Proposal 'Withdrawn,' Share Price Firm; Dialogue Leads to Compromise."</li>
<li>Regarding "share prices of companies whose shareholder proposals are withdrawn are firm during sharp sell-off," there seems little proof of causal relationship between withdrawal of shareholder proposals and stock performance.</li>
<li>Although Japanese corporate culture has tradition of doing everything without making a fuss, Japanese managers need to have serious discussion with shareholders on the balance between growth and shareholder returns.</li>
</ul>


I would like to discuss about the Nikkei article, "Shareholder Proposal 'Withdrawn,' Share Price Firm; Dialogue Leads to Compromise."
Regarding "share prices of companies whose shareholder proposals are withdrawn are firm during sharp sell-off," there seems little proof of causal relationship between withdrawal of shareholder proposals and stock performance.
Although Japanese corporate culture has tradition of doing everything without making a fuss, Japanese managers need to have serious discussion with shareholders on the balance between growth and shareholder returns.


No Causality Between Shareholder Proposal Withdrawal and Share Price, but Dialogue Is a Good Thing

<ul>
<li>I would like to discuss about the Nikkei article, "More companies disclose skill matrix at June shareholder meetings."</li>
<li>On the argument "it is unclear whether it will contribute to improve corporate governance," the key is whether the company is building corporate governance with quality in rapidly changing days.</li>
<li>While it's true that "the content of skill-matrix disclosure varies," I expect that the process of selecting directors will be improved in the future as issues are clarified through disclosure.</li>
</ul>


I would like to discuss about the Nikkei article, "More companies disclose skill matrix at June shareholder meetings."
On the argument "it is unclear whether it will contribute to improve corporate governance," the key is whether the company is building corporate governance with quality in rapidly changing days.
While it's true that "the content of skill-matrix disclosure varies," I expect that the process of selecting directors will be improved in the future as issues are clarified through disclosure.


Skills Matrix Disclosures Give Us the Opportunity to See Through The "Sham Board, Disclosures"

<ul>
<li>On June 1, the Nikkei Shimbun published an article titled "Shareholder Proposal to Toyo Suisan, Seeking Explanation of Parent-Subsidiary Listing. I would like to discuss the issues in the article.</li>
<li>Although some may have impression that this problem is on its way to being resolved due to dissolution of relatively large companies, in reality there are still many parent-subsidiary listings.</li>
<li>For companies that are slow to make management decisions, the dissolution of parent-subsidiary listings may be just the beginning, so the resolution of the parent-subsidiary listing issue has just begun.</li>
</ul>


On June 1, the Nikkei Shimbun published an article titled "Shareholder Proposal to Toyo Suisan, Seeking Explanation of Parent-Subsidiary Listing. I would like to discuss the issues in the article.
Although some may have impression that this problem is on its way to being resolved due to dissolution of relatively large companies, in reality there are still many parent-subsidiary listings.
For companies that are slow to make management decisions, the dissolution of parent-subsidiary listings may be just the beginning, so the resolution of the parent-subsidiary listing issue has just begun.


Dissolution of Parent-Subsidiary Listing Is Just the Beginning for a Slow Decision-Making Company

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>
<a href="https://www.smartkarma.com/entities/mercari-inc" target="_blank" data-smartkarma-citation="entities:27149:1" rel="noopener">Mercari Inc (4385 JP)</a> will be added to the <a href="https://www.smartkarma.com/entities/tokyo-stock-exchange-tokyo-price-index-topix" target="_blank" data-smartkarma-citation="entities:22910:1" rel="noopener">Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX)</a> at the close on 28 July.</li>
<li>There are a lot of FFW changes, mainly reductions. This leads to large funding inflows on the large index stocks.</li>
<li>We estimate the inclusion of Mercari and the FFW changes will lead to a one-way turnover of 0.56% leading to a one-way trade of JPY 442.23bn (US$3.25bn).</li>
</ul>



Mercari Inc (4385 JP) will be added to the Tokyo Stock Exchange Tokyo Price Index Topix (TPX INDEX) at the close on 28 July.
There are a lot of FFW changes, mainly reductions. This leads to large funding inflows on the large index stocks.
We estimate the inclusion of Mercari and the FFW changes will lead to a one-way turnover of 0.56% leading to a one-way trade of JPY 442.23bn (US$3.25bn).


TOPIX July Rebalance: Mercari Inclusion, FFW Changes, US$6.5bn To Trade

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)

Tighter ESG-Wash Monitoring Will Follow the New Securities Report Disclosure Rule in in 2 Years?

I would like to discuss about the article, "Get tough on ESG for show." Thanks to growing interest in environmental issues and government...

Metrical Inc

Skills Matrix Disclosures Give Us the Opportunity to See Through The "Sham Board, Disclosures"

I would like to discuss about the Nikkei article, "More companies disclose skill matrix at June AGMs but the content of skill matrix disclosure...

Metrical Inc

Dissolution of Parent-Subsidiary Listing Is Just the Beginning for a Slow Decision-Making Company

On June 1, the Nikkei Shimbun published an article titled "Shareholder Proposal to Toyo Suisan, Seeking Explanation of Parent-Subsidiary Listing. I...

Metrical Inc

TOPIX July Rebalance: Mercari Inclusion, FFW Changes, US$6.5bn To Trade

Mercari will be added to the TPX at the close on 28 July. There are a lot of FFW changes that will result in one-way turnover of 0.56% leading to a...

Brian Freitas