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>Since FY2022, the NP Margin and Equity Ratio have moved in parallel, indicating that the improvement in non-operating income and expenses has directly contributed to the increase in equity.</li>
<li>Over the past few years, while sales growth driven by passing on inflationary costs has gradually boosted operating profit, the improvement in the operating profit margin has been negligible.</li>
<li>To raise profit margins to a level that can stand up to comparisons with companies in other countries, create products with high gross profit margins to increase cash flow.</li>
</ul>


Since FY2022, the NP Margin and Equity Ratio have moved in parallel, indicating that the improvement in non-operating income and expenses has directly contributed to the increase in equity.
Over the past few years, while sales growth driven by passing on inflationary costs has gradually boosted operating profit, the improvement in the operating profit margin has been negligible.
To raise profit margins to a level that can stand up to comparisons with companies in other countries, create products with high gross profit margins to increase cash flow.


The Solution Is to Improve the Gross Profit Margin and Return Excess Cash to Shareholders

<ul>
<li>There is certainly concern that, even with this revision, many companies cannot escape the process of simply checking off items to be achieved in accordance with the guidelines for interpretation.</li>
<li>Even with this latest revision to corporate governance, there is no significant difference from the approach in which regulators have been dictating even the minutest details.</li>
<li>A lack of understanding of fiduciary duties is a factor contributing to poor profitability among Japanese companies. Has this revision to the Code managed to breathe life into the framework?</li>
</ul>


There is certainly concern that, even with this revision, many companies cannot escape the process of simply checking off items to be achieved in accordance with the guidelines for interpretation.
Even with this latest revision to corporate governance, there is no significant difference from the approach in which regulators have been dictating even the minutest details.
A lack of understanding of fiduciary duties is a factor contributing to poor profitability among Japanese companies. Has this revision to the Code managed to breathe life into the framework?


Will This Revision to the Corporate Governance Code Be the Third Time’s the Charm?

<ul>
<li>As expectations are growing for individual investors to serve as “stable shareholders,” the trend of lowering minimum trading unit is beginning to spread even to companies with high stock prices.</li>
<li>The 2001 amendment to the Commercial Code, which authorized the current minimum trading unit system, neglects the rights of shareholders holding less than the minimum trading unit.</li>
<li>The issue of wealth inequality can no longer be ignored. To prevent social instability, individuals with limited assets should be given opportunities to invest, even in smaller amounts.</li>
</ul>


As expectations are growing for individual investors to serve as “stable shareholders,” the trend of lowering minimum trading unit is beginning to spread even to companies with high stock prices.
The 2001 amendment to the Commercial Code, which authorized the current minimum trading unit system, neglects the rights of shareholders holding less than the minimum trading unit.
The issue of wealth inequality can no longer be ignored. To prevent social instability, individuals with limited assets should be given opportunities to invest, even in smaller amounts.


Will They Keep Requesting a Reduction in the Minimum Investment Amount from Now On?

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Nicholas Pezolano

Co-Founder & CEO

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Newmark Risk

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Equity Derivatives

TSE Tokyo Price Index TOPIX / Equity Derivatives

<ul><li>A cross-country study on the post earning announcement drift effect.</li><li>We explore the use of various options-implied analytics to systematically view returns around earnings announcements.  </li><li>Options-Implied Analytics can provide empowering information to better inform investment decisions.</li></ul>

A cross-country study on the post earning announcement drift effect.We explore the use of various options-implied analytics to systematically view returns around earnings announcements.  Options-Implied Analytics can provide empowering information to better inform investment decisions.

EQD | A Systematic Look at the Post Earnings Announcement Drift Across Asia

<ul>
<li>When shareholders have a certain degree of influence through voting rights, management should be expected to conduct operations with discipline and accountability through dialogue with shareholders.</li>
<li>Simply aiming to reduce cash reserves is risky. The problem with Japanese companies is a lack of awareness that mission is to maximize shareholder interest and sustainably grow corporate value.</li>
<li>This revision to the Corporate Governance Code may have given investors mixed signals regarding the ongoing formalization—and potential regression—of corporate governance at Japanese companies.</li>
</ul>


When shareholders have a certain degree of influence through voting rights, management should be expected to conduct operations with discipline and accountability through dialogue with shareholders.
Simply aiming to reduce cash reserves is risky. The problem with Japanese companies is a lack of awareness that mission is to maximize shareholder interest and sustainably grow corporate value.
This revision to the Corporate Governance Code may have given investors mixed signals regarding the ongoing formalization—and potential regression—of corporate governance at Japanese companies.


Simply Aiming to Reduce Cash on Hand Is Dangerous—a Shift in Mindset Is Needed

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)

The Solution Is to Improve the Gross Profit Margin and Return Excess Cash to Shareholders

I would like to discuss the issues on the July 29 Nikkei article titled “The Background Behind the Improvement in Listed Companies’ Profitability.”

Metrical Inc

Will This Revision to the Corporate Governance Code Be the Third Time’s the Charm?

I would like to discuss the issues on the August 6 Nikkei article titled “The Core of the Corporate Governance Code Revision.”

Metrical Inc

Will They Keep Requesting a Reduction in the Minimum Investment Amount from Now On?

I would like to discuss the issues on the TSE’s disclosure document on July 28, titled “Request for Consideration Regarding the Reduction of...

Metrical Inc

EQD | A Systematic Look at the Post Earnings Announcement Drift Across Asia

We leverage a few analytics from NewMark Risk's proprietary Options Implied Analytics library to enhance common strategies to trade earnings...

Nicholas Pezolano

Simply Aiming to Reduce Cash on Hand Is Dangerous—a Shift in Mindset Is Needed

I would like to discuss the issues on the July 26 Nikkei article titled “Companies Should Leverage Corporate Governance Guidelines to Drive Growth.”

Metrical Inc