Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<div><p>JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.</p></div><div><p>A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. </p></div><div><p>Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. </p></div>

JPX-Nikkei 400 is composed of common stocks listed in the First Section, Second Section, MOTHERS Market, and the JASDAQ Market of the Tokyo Stock Exchange. This is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents that are selected based on several factors including market capitalization, trading value, operating profits, and ROE.A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. This review will be conducted using the final business day of June as the base date. Quiddity provides quantitative research on pre-event basket strategies surrounding this Index Rebalance event and others. Below is a discussion on the latest adjustments required for the basket portfolio for the 2021 Rebalance based on May-end data. 

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

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.

<p>This week marks the end of the peak period for financial reporting by companies with fiscal year end in March, followed by analyst meetings. Many companies review and update their mid-term management plans in conjunction with their full-year earnings announcements. There are still cases where companies announce KPIs that are somewhat difficult to understand. In some cases, they still announce KPIs that are somewhat difficult to understand: "While setting a target to increase ROE, we aim to maintain and improve the debt-equity ratio. As you all well know, in order to raise ROE and maintain/improve the debt-to-equity ratio at the same time, it is necessary to further increase the return on sales and/or the total asset turnover ratio. Therefore, when setting such conflicting goals, it is necessary to explain the path to achieving them in more detail than just profit margin and asset turnover.</p>

This week marks the end of the peak period for financial reporting by companies with fiscal year end in March, followed by analyst meetings. Many companies review and update their mid-term management plans in conjunction with their full-year earnings announcements. There are still cases where companies announce KPIs that are somewhat difficult to understand. In some cases, they still announce KPIs that are somewhat difficult to understand: "While setting a target to increase ROE, we aim to maintain and improve the debt-equity ratio. As you all well know, in order to raise ROE and maintain/improve the debt-to-equity ratio at the same time, it is necessary to further increase the return on sales and/or the total asset turnover ratio. Therefore, when setting such conflicting goals, it is necessary to explain the path to achieving them in more detail than just profit margin and asset turnover.

Japan's Governance: Mid-Term Management Plan and KPI

Japan

TOKYU CONSTRUCTION CO., LTD. is established through the reorganization of Tokyu Construction.  The Company is a general contractor that builds commercial, institutional, and residential buildings.  Tokyu Construction also performs civil engineering works for dams, bridges, and transportation system. The Company is a member of Tokyu group.

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Tokyu Construction (1720 JP)

JPX-Nikkei 400 Rebalance 2021: Pre-Event Basket Adjustments for May-End

We look at the JPX Nikkei 400 Pre-event Rebalance Trade on a monthly basis, checking what is the most likely portfolio as we approach the base date...

Janaghan Jeyakumar, CFA

Japan's Governance: Mid-Term Management Plan and KPI

There are still some inadequately explained KPIs, "While setting a goal of raising ROE, we aim to improve the debt-equity ratio.A company that has...

Metrical Inc

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