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>I will discuss the Nikkei article, "The Ukraine crisis has triggered a conflict of interest between companies and the government, whose ESG values have become increasingly prevalent in business management."</li>
<li>As far as this issue is concerned, a company's management strategy is not made from the perspective of ESG, an area where some special values exist.</li>
<li>Management implements business strategies to maximize the company's corporate value, sustainable growth, and shareholder returns over the long term. Needless to say, this objective includes ESG.</li>
</ul>


I will discuss the Nikkei article, "The Ukraine crisis has triggered a conflict of interest between companies and the government, whose ESG values have become increasingly prevalent in business management."
As far as this issue is concerned, a company's management strategy is not made from the perspective of ESG, an area where some special values exist.
Management implements business strategies to maximize the company's corporate value, sustainable growth, and shareholder returns over the long term. Needless to say, this objective includes ESG.


Profit or ESG Should Not Be Prioritized, but ESG Should Be Aligned with Business Strategy

<ul>
<li>I would like to discuss the issues on the Nikkei article titled "Over 10 Companies Hold 'Continuation Meetings' of Shareholders' Meetings Due to Improper Accounting, etc."</li>
<li>Companies that hold "continuation meetings" are divided into 2 groups: inappropriate accounting and China lockdown. However, the companies in both groups plan to hold AGMs on days AGMs are concentrated.</li>
<li>It is too much to ask shareholders for voting without financial results, and many companies seem intent on avoiding dialogue with shareholders by holding AGM on such a concentration day.</li>
</ul>


I would like to discuss the issues on the Nikkei article titled "Over 10 Companies Hold 'Continuation Meetings' of Shareholders' Meetings Due to Improper Accounting, etc."
Companies that hold "continuation meetings" are divided into 2 groups: inappropriate accounting and China lockdown. However, the companies in both groups plan to hold AGMs on days AGMs are concentrated.
It is too much to ask shareholders for voting without financial results, and many companies seem intent on avoiding dialogue with shareholders by holding AGM on such a concentration day.


Companies Holding "Continuation Meetings" Will Hold Them on the Days of Concentration of the AGMs

<ul>
<li>I would like to discuss the points on the Nikkei article, "Mercari's Prime Market Approval Raises Hopes for Growth Market to Include Similar Companies in the Future."</li>
<li>Mercari's listing on prime market is a great hope for companies planning to list on prime market, and the inclusion in the TOPIX is also positive for their stock price.</li>
<li>"Transitional measures" companies need to carefully discuss the feasibility of the plan for meeting the listing criteria and whether they should continue to be listed as before.</li>
</ul>


I would like to discuss the points on the Nikkei article, "Mercari's Prime Market Approval Raises Hopes for Growth Market to Include Similar Companies in the Future."
Mercari's listing on prime market is a great hope for companies planning to list on prime market, and the inclusion in the TOPIX is also positive for their stock price.
"Transitional measures" companies need to carefully discuss the feasibility of the plan for meeting the listing criteria and whether they should continue to be listed as before.


The Light and Dark Sides of the Creation of the TSE Prime Market Make Us Think Again

<ul>
<li>I would like to discuss the Nikkei article on "Stock market interest is shifting to undervalued stocks, but analyst coverage of small- and mid-cap stocks is scarce."</li>
<li>Assuming investors don't buy a stock because it's cheap, but because they understand the gap between its intrinsic value and the share price, to make many investors understand the value.</li>
<li>Companies are required to execute capital allocations and communicate with analysts and investors to increase corporate value, and those that were able to do so were able to raise valuations.</li>
</ul>


I would like to discuss the Nikkei article on "Stock market interest is shifting to undervalued stocks, but analyst coverage of small- and mid-cap stocks is scarce."
Assuming investors don't buy a stock because it's cheap, but because they understand the gap between its intrinsic value and the share price, to make many investors understand the value.
Companies are required to execute capital allocations and communicate with analysts and investors to increase corporate value, and those that were able to do so were able to raise valuations.


Are Japanese Stocks Undervalued or Is There a Reason for Stagnant Valuations?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

TSE Tokyo Price Index TOPIX / Event-Driven

<ul>
<li>The GPIF reported its <a href="https://www.gpif.go.jp/operation/21434948gpif/2021_4Q_0701_jp.pdf" target="_blank" rel="noopener">annual investment results</a> for the FY to March 2022 last Friday. The investment report makes for interesting reading.</li>
<li>The GPIF made 5.42% but alpha was negative 6bp vs time-weighted and money-weighted benchmarks.</li>
<li>The re-allocations amongst asset classes now means more money tracks TOPIX, and it means active managers have their work cut out for them going forward.</li>
</ul>


The GPIF reported its annual investment results for the FY to March 2022 last Friday. The investment report makes for interesting reading.
The GPIF made 5.42% but alpha was negative 6bp vs time-weighted and money-weighted benchmarks.
The re-allocations amongst asset classes now means more money tracks TOPIX, and it means active managers have their work cut out for them going forward.


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)

Profit or ESG Should Not Be Prioritized, but ESG Should Be Aligned with Business Strategy

I will discuss issues on the article, "The Ukraine crisis has triggered conflict of interest between companies and the government, whose ESG values...

Metrical Inc

Companies Holding "Continuation Meetings" Will Hold Them on the Days of Concentration of the AGMs

I would like to discuss on the Nikkei article titled "Over 10 Companies Hold Continuation Meetings." The date of AGMs should be considered as a...

Metrical Inc

The Light and Dark Sides of the Creation of the TSE Prime Market Make Us Think Again

I would like to discuss the points on the Nikkei article, "Mercari's Prime Market Approval Raises Hopes for Growth Market to Include Similar...

Metrical Inc

Are Japanese Stocks Undervalued or Is There a Reason for Stagnant Valuations?

I would like to discuss the Nikkei article on "Stock market interest is shifting to undervalued stocks, but analyst coverage of small- and mid-cap...

Metrical Inc

JAPAN PASSIVE - The GPIF in FY2021

The GPIF last Friday reported its annual results to March 2022 and in the report, there were pointed comments about risk, risk mitigation...

Travis Lundy