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>TSE growth market, which institutional investors distance themselves from due to its low liquidity, is a market where gamblers who focus on price movements gobble up one IPO after another.</li>
<li>To convert users from gamblers to investors, companies with long-term growth potential should be listed. Raising the market capitalization criteria for Growth Market could improve the quality of IPOs.</li>
<li>Meanwhile, in order to improve the quality of the TSE Growth Market, existing listed companies should consider going private through an MBO.</li>
</ul>


TSE growth market, which institutional investors distance themselves from due to its low liquidity, is a market where gamblers who focus on price movements gobble up one IPO after another.
To convert users from gamblers to investors, companies with long-term growth potential should be listed. Raising the market capitalization criteria for Growth Market could improve the quality of IPOs.
Meanwhile, in order to improve the quality of the TSE Growth Market, existing listed companies should consider going private through an MBO.


Smaller PE Funds May Have Opportunities to Invest in MBOs of TSE Growth Market Companies

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/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> could price their secondary offering after market close today. The stock is down 10.5% since the rumors of the placement began 7 trading sessions ago.</li>
<li>The <a href="https://www.smartkarma.com/entities/philadelphia-stock-exchange-semiconductor-index" target="_blank" data-smartkarma-citation="entities:32992:1" rel="noopener">Philadelphia Stock Exchange Semiconductor Index (SOX INDEX)</a> has been dropping over the last few days and is 8.6% lower over the last 8 trading days.</li>
<li>
<a href="https://www.smartkarma.com/entities/kokusai-electric-corp" target="_blank" data-smartkarma-citation="entities:40152:1" rel="noopener">Kokusai Electric (6525 JP)</a> has been trading higher on expectations of index inclusion in August, but that could move to November now.</li>
</ul>



Kokusai Electric (6525 JP) could price their secondary offering after market close today. The stock is down 10.5% since the rumors of the placement began 7 trading sessions ago.
The Philadelphia Stock Exchange Semiconductor Index (SOX INDEX) has been dropping over the last few days and is 8.6% lower over the last 8 trading days.

Kokusai Electric (6525 JP) has been trading higher on expectations of index inclusion in August, but that could move to November now.


Kokusai Electric (6525 JP): Placement Price Could Be Determined Today; Index Impact Could Be Delayed

<ul>
<li>The positive impact of increased dividends must be discounted because seniors, who receive most dividends, are non-working generations and are more vulnerable to the negative impact of rising consumer prices.</li>
<li>The high level of cash on hand should be used effectively for investments and shareholder returns. Looking at listed companies as a whole, both ROE and DOE are below FY2018.</li>
<li>Although the too-low dividend payout of Japanese companies have been corrected, the fact that ROE is still low means that few companies are chosen as investment targets by global investors.</li>
</ul>


The positive impact of increased dividends must be discounted because seniors, who receive most dividends, are non-working generations and are more vulnerable to the negative impact of rising consumer prices.
The high level of cash on hand should be used effectively for investments and shareholder returns. Looking at listed companies as a whole, both ROE and DOE are below FY2018.
Although the too-low dividend payout of Japanese companies have been corrected, the fact that ROE is still low means that few companies are chosen as investment targets by global investors.


To Be Selected by Global Investors as an Investment Target, Increasing Cash Flow Is Crucial

<ul>
<li>For first time in 30 years, the fund is back, matching the demand of companies that want to reduce cross-holdings immediately and companies that want more time to sell cross-holdings.</li>
<li>If the voting rights of cross-shareholdings contributed to the fund are retained, corporate governance will remain an issue until the fund's investment is terminated.</li>
<li>In reviewing recently filed annual securities reports, we often see cases where cross-held shares in more closely related companies are contributed to retirement benefit trusts instead of being sold.</li>
</ul>


For first time in 30 years, the fund is back, matching the demand of companies that want to reduce cross-holdings immediately and companies that want more time to sell cross-holdings.
If the voting rights of cross-shareholdings contributed to the fund are retained, corporate governance will remain an issue until the fund's investment is terminated.
In reviewing recently filed annual securities reports, we often see cases where cross-held shares in more closely related companies are contributed to retirement benefit trusts instead of being sold.


A New Type Of "Deemed Shareholding" Has Emerged!

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

Rikki Malik

Cross Asset Strategy

<ul>
<li>The first Act of this drama has played out in a very short time frame</li>
<li>The trend has likely changed for the JPY and it won’t be back to business as usual for the carry trade</li>
<li>This should benefit both real incomes and consumption in Japan</li>
</ul>


The first Act of this drama has played out in a very short time frame
The trend has likely changed for the JPY and it won’t be back to business as usual for the carry trade
This should benefit both real incomes and consumption in Japan


Are We There Yet? What Next for Japanese Assets?

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)

Smaller PE Funds May Have Opportunities to Invest in MBOs of TSE Growth Market Companies

I would like to discuss the issues on the June 24 Nikkei article, "TSE Growth Market Shrinking, IPOs Smaller, Drivers Long Absent."

Metrical Inc

Kokusai Electric (6525 JP): Placement Price Could Be Determined Today; Index Impact Could Be Delayed

Kokusai Electric had run up versus the SOX Index. Then, Kokusai Electric underperformed the SOX during the selloff. With an early (surprise) index...

Brian Freitas

To Be Selected by Global Investors as an Investment Target, Increasing Cash Flow Is Crucial

I would like to discuss the issues on the June 20 Nikkei Shimbun article, “Record 40% of Companies Increasing Dividends; Households Receive 3.6...

Metrical Inc

A New Type Of "Deemed Shareholding" Has Emerged!

I would like to discuss the issues on the June 20 Nikkei article, "SBI-affiliated cross-shareholding dissolution support fund to reach 100 billion...

Metrical Inc

Are We There Yet? What Next for Japanese Assets?

The change in trend in the JPY will shift investor sector preferences and benefit segments of Japan's economy through increased real incomes and...

Rikki Malik

Smaller PE Funds May Have Opportunities to Invest in MBOs of TSE Growth Market Companies

I would like to discuss the issues on the June 24 Nikkei article, "TSE Growth Market Shrinking, IPOs Smaller, Drivers Long Absent."

Metrical Inc

Kokusai Electric (6525 JP): Placement Price Could Be Determined Today; Index Impact Could Be Delayed

Kokusai Electric had run up versus the SOX Index. Then, Kokusai Electric underperformed the SOX during the selloff. With an early (surprise) index...

Brian Freitas

To Be Selected by Global Investors as an Investment Target, Increasing Cash Flow Is Crucial

I would like to discuss the issues on the June 20 Nikkei Shimbun article, “Record 40% of Companies Increasing Dividends; Households Receive 3.6...

Metrical Inc

A New Type Of "Deemed Shareholding" Has Emerged!

I would like to discuss the issues on the June 20 Nikkei article, "SBI-affiliated cross-shareholding dissolution support fund to reach 100 billion...

Metrical Inc

Are We There Yet? What Next for Japanese Assets?

​The change in trend in the JPY will shift investor sector preferences and benefit segments of Japan's economy through increased real incomes and...

Rikki Malik

The change in trend in the JPY will shift investor sector preferences and benefit segments of Japan's economy through increased real incomes and...