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

Rikki Malik

Cross Asset Strategy

<ul>
<li>A monthly review of how the markets and our themes are currently performing</li>
<li>Analysing what went wrong and what went right in stocks and sectors</li>
<li>Highlighting positions added or removed from the thematic investment portfolio</li>
</ul>


A monthly review of how the markets and our themes are currently performing
Analysing what went wrong and what went right in stocks and sectors
Highlighting positions added or removed from the thematic investment portfolio


September Themes and Thematic Portfolio Review

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>Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.</li>
<li>It's not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it's realistic to move to a market with looser criteria for maintaining listing.</li>
<li>Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.</li>
</ul>


Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.
It's not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it's realistic to move to a market with looser criteria for maintaining listing.
Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.


Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

<ul>
<li>Certainly, the “TSE's request” has begun to change companies' mindsets, but what we focus on now is whether they have put the plan into action and whether it's producing results.</li>
<li>The importance of investor engagement is also indicated in the Japan Investor Relations Association's survey summary. Companies that receive overseas investor engagement are furthering their efforts to improve profitability.</li>
<li>Even among companies with high IR awareness, few have taken serious steps to reform their business portfolios, as under 60% have begun to reform business portfolios.</li>
</ul>


Certainly, the “TSE's request” has begun to change companies' mindsets, but what we focus on now is whether they have put the plan into action and whether it's producing results.
The importance of investor engagement is also indicated in the Japan Investor Relations Association's survey summary. Companies that receive overseas investor engagement are furthering their efforts to improve profitability.
Even among companies with high IR awareness, few have taken serious steps to reform their business portfolios, as under 60% have begun to reform business portfolios.


Not Many Companies Have Implemented Full-Scale Improvements in Return on Capital

<ul>
<li>Since it's difficult for all prime market companies to achieve the 30% female board members by 2030, the goal may be achieved by including non-statutory executive officers in board members.</li>
<li>Companies are stuck in matching numbers, and government is unwilling to address the fundamental issues. There's risk that original objective of shifting to value-creating management through ensuring diversity is lost.</li>
<li>Policy changes to create environment where women don't have to leave workforce for childbirth, childcare, etc., and to change people's mindsets are impossible without the leadership of a non-diverse legislature.</li>
</ul>


Since it's difficult for all prime market companies to achieve the 30% female board members by 2030, the goal may be achieved by including non-statutory executive officers in board members.
Companies are stuck in matching numbers, and government is unwilling to address the fundamental issues. There's risk that original objective of shifting to value-creating management through ensuring diversity is lost.
Policy changes to create environment where women don't have to leave workforce for childbirth, childcare, etc., and to change people's mindsets are impossible without the leadership of a non-diverse legislature.


Achieving the % of Female Board Members by Matching Numbers Doesn't Achieve the Original Goal Either

<ul>
<li>A review of recent events/data impacting our investment themes or outlook</li>
<li>China announces a barrage of  fiscal and monetary stimulus plans</li>
<li>New LDP leader and Japan Prime Minister impacts the markets</li>
</ul>


A review of recent events/data impacting our investment themes or outlook
China announces a barrage of  fiscal and monetary stimulus plans
New LDP leader and Japan Prime Minister impacts the markets


Overview #10 -China Knocks It Out of the Park

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)

September Themes and Thematic Portfolio Review

We review overall market performance, our investment themes, highlighting additions and substractions in the thematic portfolio.

Rikki Malik

Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

I would like to discuss the material “Status of Companies to Which Transitional Measures are Applied” disclosed by TSE on August 19, 2024.

Metrical Inc

Not Many Companies Have Implemented Full-Scale Improvements in Return on Capital

I would like to discuss the August 19 Nikkei Shimbun article, “80% of listed companies are ‘conscious of cost of capital and stock price,’...

Metrical Inc

Achieving the % of Female Board Members by Matching Numbers Doesn't Achieve the Original Goal Either

I would like to discuss the issues on the August 19 Nikkei article, “Prime: 69 Companies Still Have ‘Zero’ Female Board Members, Down Half from...

Metrical Inc

Overview #10 -China Knocks It Out of the Park

A review of recent events/data impacting our investment themes and outlook. We look at the implications of the China stumulus package and Japan's...

Rikki Malik