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>Outside director compensation is increasing, but there is a considerable difference in compensation for outside directors between large and small companies and between small and medium-sized publicly traded companies.</li>
<li>Every time a scandal occurs, there is a lack of shareholder-oriented management and a smattering of outside board members who turn a blind eye to the scandal.</li>
<li>A compensation model that includes equity compensation should be created to maximize the power of outside directors, with “management from the perspective of shareholders” as a necessary condition.</li>
</ul>


Outside director compensation is increasing, but there is a considerable difference in compensation for outside directors between large and small companies and between small and medium-sized publicly traded companies.
Every time a scandal occurs, there is a lack of shareholder-oriented management and a smattering of outside board members who turn a blind eye to the scandal.
A compensation model that includes equity compensation should be created to maximize the power of outside directors, with “management from the perspective of shareholders” as a necessary condition.


A Compensation Model Should Be Created to Maximize Outside Directors' Abilities as Necessary Talents

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

Royal Bank Of Canada / Technical Analysis

<ul>
<li>The SPX is breaking out after several months of consolidation. Same with the MSCI ACWI index. We are upgrading our outlook on global equities (MSCI ACWI) to bullish.</li>
<li>Breakouts could mean other countries are getting ready to break out, but the U.S. (S&amp;P 500) remains our only country overweight</li>
<li>Moreover, major indexes in the next two largest global equity markets (Europe and Japan) remain below critical resistances of 5000-5120 on the EURO STOXX 50 and 2740-2820 on the TOPIX.</li>
</ul>


The SPX is breaking out after several months of consolidation. Same with the MSCI ACWI index. We are upgrading our outlook on global equities (MSCI ACWI) to bullish.
Breakouts could mean other countries are getting ready to break out, but the U.S. (S&amp;P 500) remains our only country overweight
Moreover, major indexes in the next two largest global equity markets (Europe and Japan) remain below critical resistances of 5000-5120 on the EURO STOXX 50 and 2740-2820 on the TOPIX.


S&P 500 and MSCI ACWI Breaking Out; Upgrading MSCI ACWI to Bullish; Buys in Services, Financials

<ul>
<li>The number of days to disclose first- and third-quarter financial results was 37.0 days, roughly the same timing as the previous year, regardless of whether reviews were conducted or not.</li>
<li>The larger market capitalization companies are more likely to conduct voluntary reviews, and the larger market capitalization companies are more positive about ensuring the reliability of their disclosure information.</li>
<li>Despite a slight increase from the previous year, only a little more than 10% of all companies disclosed cash flow statements in the first and third quarters.</li>
</ul>


The number of days to disclose first- and third-quarter financial results was 37.0 days, roughly the same timing as the previous year, regardless of whether reviews were conducted or not.
The larger market capitalization companies are more likely to conduct voluntary reviews, and the larger market capitalization companies are more positive about ensuring the reliability of their disclosure information.
Despite a slight increase from the previous year, only a little more than 10% of all companies disclosed cash flow statements in the first and third quarters.


No Disruption in Quarterly Disclosure Review, but a Few Companies Disclosed CF Statements in 1Q & 3Q

<ul>
<li>It's understandable that compensation is paid for managing a global business and achieving significant growth, but it's also paid for bloated performance in yen terms due to the weak yen.</li>
<li>Employee engagement is very important for value-added products and more money should be spent on human capital. Otherwise, higher profit margins are unlikely to be achieved.</li>
<li>The election of directors at AGMs rarely results in rejection of the company's proposal. Cross-shareholdings should be reduced so that managers whose “employment” is protected by cross-shareholdings don't receive commensurate compensation.</li>
</ul>


It's understandable that compensation is paid for managing a global business and achieving significant growth, but it's also paid for bloated performance in yen terms due to the weak yen.
Employee engagement is very important for value-added products and more money should be spent on human capital. Otherwise, higher profit margins are unlikely to be achieved.
The election of directors at AGMs rarely results in rejection of the company's proposal. Cross-shareholdings should be reduced so that managers whose “employment” is protected by cross-shareholdings don't receive commensurate compensation.


Fair for Managers Who Are Protected by Cross-Shareholding and Get Inflated Payout Due to Weak Yen?

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

Rikki Malik

Cross Asset Strategy

<ul>
<li>With US bonds oversold, we expect the Japanese Yen to  strengthen</li>
<li>Supplementary Budget from the LDP as new cabinet's approval rating drops</li>
<li>The broad Japanese indices will struggle here as this plays out</li>
</ul>


With US bonds oversold, we expect the Japanese Yen to  strengthen
Supplementary Budget from the LDP as new cabinet's approval rating drops
The broad Japanese indices will struggle here as this plays out


Tactical Trading - JPY Weakness Has Likely Run Its Course for Now

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)

A Compensation Model Should Be Created to Maximize Outside Directors' Abilities as Necessary Talents

I would like to discuss the issues on the September 4 Nikkei Newspaper article, “Outside Directors of Listed Companies Receive 17.2 Million Yen in...

Metrical Inc

S&P 500 and MSCI ACWI Breaking Out; Upgrading MSCI ACWI to Bullish; Buys in Services, Financials

$SPX and MSCI $ACWI Breaking Out; Upgrading Outlook on ACWI and SPX to Bullish as of last Fridays close above 5783; Buys in Services, Financials;...

Vermilion Research

No Disruption in Quarterly Disclosure Review, but a Few Companies Disclosed CF Statements in 1Q & 3Q

I would like to discuss the issues on disclosure by TSE on September 5, “Disclosure Trends of Quarterly Financial Statements after the Revision of...

Metrical Inc

Fair for Managers Who Are Protected by Cross-Shareholding and Get Inflated Payout Due to Weak Yen?

I would like to discuss the issues of the August 6 article, “Top Management Compensation at Japanese Companies Highest in Three Consecutive Years,...

Metrical Inc

Tactical Trading - JPY Weakness Has Likely Run Its Course for Now

With US government bonds oversold, the Japanese Yen is expected to strengthen causing the major Japanese indices to continue to tread water

Rikki Malik

A Compensation Model Should Be Created to Maximize Outside Directors' Abilities as Necessary Talents

I would like to discuss the issues on the September 4 Nikkei Newspaper article, “Outside Directors of Listed Companies Receive 17.2 Million Yen in...

Metrical Inc

S&P 500 and MSCI ACWI Breaking Out; Upgrading MSCI ACWI to Bullish; Buys in Services, Financials

$SPX and MSCI $ACWI Breaking Out; Upgrading Outlook on ACWI and SPX to Bullish as of last Fridays close above 5783; Buys in Services, Financials;...

Vermilion Research

No Disruption in Quarterly Disclosure Review, but a Few Companies Disclosed CF Statements in 1Q & 3Q

I would like to discuss the issues on disclosure by TSE on September 5, “Disclosure Trends of Quarterly Financial Statements after the Revision of...

Metrical Inc

Fair for Managers Who Are Protected by Cross-Shareholding and Get Inflated Payout Due to Weak Yen?

I would like to discuss the issues of the August 6 article, “Top Management Compensation at Japanese Companies Highest in Three Consecutive Years,...

Metrical Inc

Tactical Trading - JPY Weakness Has Likely Run Its Course for Now

With ​US government bonds oversold, the Japanese Yen is expected to strengthen causing the major Japanese indices to continue to tread water

Rikki Malik

With US government bonds oversold, the Japanese Yen is expected to strengthen causing the major Japanese indices to continue to tread water