Providing Analysis/Proposals on the Economy, Society, and Investment Information
Daiwa Securities Group as an integrated securities group provides, in addition to investment information, a wide range of information on the economy and society. We hope that the measures we propose from a long-term perspective will be helpful to customers, investors and a variety of stakeholders.
Easy-to-Understand Communication of Information
Daiwa Securities publishes information for a wide range of people from institutional and retail investors to those who are about to start investing. The central role in the provision of information is played by highly specialized analysts and strategists from the Investment Strategy, Equity Research, and Fixed Income, Currency and Commodities (FICC) Research Departments. They provide information mainly through reports based on their unique analysis. Our information is based on close collection and analysis of data. Even if the same person is providing that information, we tailor the presentation, depending on whether it is for retail investors or institutional investors, who are investment professionals. For example, if information is targeted at retail investors, we implement various measures to make it more visually understandable. To remove the general perception that securities investment or securities companies are complicated, we believe it is one of our missions to work toward communicating our analysis using easy-to-understand language.
Initiatives to Provide Information on ESG
Daiwa Securities' Equity Research Department is a group of analysts and strategists. They analyze and evaluate information released by companies, and provide investment information and ideas to institutional investors.
The department has designated multiple staff members as responsible for ESG information. This is part of its efforts to put an organizational structure in place to respond to increased demand for information on ESG investment following the signing of the United Nations' Principles for Responsible Investment (PRI) by the Government Pension Investment Fund (GPIF) in 2015. Specifically, the department provides investment information useful for ESG integration to institutional investors, set up ESG meetings between investors and companies, and host seminars for experts by subject area. For example, with regard to the environment, in FY2017 we held a meeting on biodiversity and natural capital, inviting chemical, food, and housing manufacturers. We also held seminars introducing research on the environmental load caused by companies and the capital cost of stocks to university researchers.
Institutional investors have diverse needs, reflecting their respective investment policies. We will further enhance our ESG information by boosting the analytical skills and communication capabilities of our analysts and strategists.
Reports and seminars on ESG
- Release of ESG reports and commentary articles on ESG keywords (DIR) : 22 reports and articles (2018)
Initiatives by Daiwa Institute of Research
Comprehensive Provision of Information and Policy Proposal Activities
Daiwa Institute of Research (DIR), which assumes the think-tank role of Daiwa Securities Group, provides wide-ranging analysis and information to the public. At DIR, we consider it our mission to engage in comprehensive provision of information and policy proposal activities concerning the financial and capital markets and the real economy. We have always sought to provide up-to-date and in-depth information and a unique viewpoint that has not been presented by others. In order to provide information that satisfies the needs of the public, we also exchange information and hold discussions with businesses, investors, public institutions including governments and municipalities, and various economic groups, as well as overseas think-tanks and media. In this way, we are able to analyze the currents and trends of society and disseminate information.
We are also stepping up the release of ESG information, communicating wide-ranging information via our website and "DIR Research Quarterly Review" (our quarterly journal) regarding community vitalization, environmental problems, women's active participation in society, workstyle reform, corporate governance and other issues.
Provision of information by DIR through diverse media
- Number of reports posted on the website : 531 reports (Results for FY2018)
- Full texts of reports available on the website
- Number of recent hits on the research division's page : 3.93 million hits (Results for FY2018)
Strengthening the Provision of Information
The Research Division of DIR launched the Policy Research Department in FY2017. In addition to providing information on the macro economy and financial and capital markets within and outside Japan, the company is now focusing on making policy proposals based on multifaceted analysis of issues such as measures for maintaining the sustainability of government finances and the social security system, and the directions that society and businesses are required to pursue from an ESG perspective. Moreover, Office of SDGs Research & Consulting was established in April 2019 to contribute to society through dissemination of information aimed at solving various issues. Office of AI Analytic Research, which was launched at the same time, works on new methods for predicting and analyzing the economy.
Economic Analysis Initiatives Using AI
DIR has been releasing the Daiwa Regional AI (Regional Love) Index, which calculates economic sentiment by region, since July 2017 to contribute to the development of regional society.
Japan is faced with the important issue of breaking the vicious cycle of population decline and contraction of regional economies to realize regional revitalization. To promote such regional revitalization, it is necessary to properly understand the current state of regional economies, in addition to executing the policies that suit regional characteristics.
The Daiwa Regional AI (Regional Love) Index utilizes a state-of-the-art artificial intelligence (AI) model and also incorporates economists' knowledge to calculate overall economic sentiment by region. It has the following advantages:
- 1.demonstrating overall economic sentiment quantitatively and promptly by region;
- 2.grasping regional economic sentiment in a historical manner; and
- 3.enabling analysis of which fields (such as "consumption" and "exports") provide impact and cause changes in overall economic sentiment.
We calculate the index every quarter using the AI model developed by DIR, and release it on our website.
The Research Division of DIR has also developed an economic indicator forecast model using AI, and started releasing forecast figures on the company's website in January 2019. Multiple economists had previously taken charge of forecast work by indicator covered by the company's monthly forecasts. Replacing this previous method with the AI-based economic indicator forecast model has enabled us to enhance the efficiency of our forecasting work and standardize our analytical methods. The monthly economic indicators published in our forecasts are as follows:
- Machinery orders from private sector (excluding orders for ships and those from electric power companies)
- Unemployment rate
- Employment referrals for general workers (active job openings-to-applicants ratio)
- Corporate Goods Price Index (producer price index)
- Indices of Tertiary Industry Activity
Provision of Information through Diverse Media
- Lectures and Media Appearances
- The Research Division of DIR adopts a variety of methods for providing information. These include the writing of reports; contribution to DIR Research Quarterly Review, newspapers and economic magazines; media interviews; TV appearances; lectures, seminars, and presentations at workshops; the publication of books, and participation in government councils as members. We strive to explain in an easy to understand way complex issues related to the economy, society, and policy issues within and outside Japan, while emphasizing the quality of reports. We ensure the reliability of our reports by requiring them to undergo review by a specialized section. As a result, the information we provide has improved in both quality and quantity, and we are communicating with customers on a continuously increasing number of occasions.
- Issuing of Books and Booklets
- The Investment Strategy Department of Daiwa Securities issues the periodical "Daiwa Investment Monthly" and other publications as tools for communicating information to general customers. They are distributed to sales branches of Daiwa Securities and are also available on the Internet. "Daiwa Investment Monthly" videos can also be viewed with a smartphone. We are further evolving our booklets to make them easier to understand.
We also provide information in various ways to general customers, including books available through publishers, desk calendars with information on financial events, and wall-hanging market charts.