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.

Companies Should Show a Path to Accelerated Profit Growth Rather than Shareholder Returns

The Essence of the Matter Is the Low Return on Cash Flow Generated by the Company's Business

Higher P/E Is Driver for This Stock Rally. Profit Growth Is Necessary for Further Stock Rally

Amid Slow ROE Improvement, Calls for Stronger Shareholder Returns Will Become Even Stronger

TSE Should Shift Its Business Model from Growing Number of Listed Companies to Expanding Market Cap

Growth in Corporate Value over Longer Term Is More Important than Meeting Immediate Listing Criteria

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

<ul>
<li>TSE market capitalization of has doubled since 1990 and the number of companies has doubled, while TOPIX is 20% lower than its 1989 high. Money went mainly to IPOs.</li>
<li>P/B, TSE's expectation for stock price appreciation, had high correlation with TOPIX, 0.84 from 1999-2019. However, it correlated negatively for 4 years from 2020 with other factors having significant impact.</li>
<li>Correlation between TOPIX and nominal GDP is 0.94 for 2020-2023, showing higher correlation. Expectations of higher nominal profits caused by transition from deflation to inflation are behind the stock rally.</li>
</ul>


TSE market capitalization of has doubled since 1990 and the number of companies has doubled, while TOPIX is 20% lower than its 1989 high. Money went mainly to IPOs.
P/B, TSE's expectation for stock price appreciation, had high correlation with TOPIX, 0.84 from 1999-2019. However, it correlated negatively for 4 years from 2020 with other factors having significant impact.
Correlation between TOPIX and nominal GDP is 0.94 for 2020-2023, showing higher correlation. Expectations of higher nominal profits caused by transition from deflation to inflation are behind the stock rally.


Expanding Nominal Profits from Shift from Deflation Rather than P/B Is the Driver of Stock Prices

TSE Tokyo Price Index TOPIX

Expanding Nominal Profits from Shift from Deflation Rather than P/B Is the Driver of Stock Prices