I received some constructive feedback on my Link & Motivation (LMI) note, which I had shared with LMI management (please let me know if you have not seen my original LMI note)

1. TOPIX Rebalancing

Before sharing LMI’s responses, I need to point out one stock driver which I neglected to point out in my initial note: the TOPIX rebalancing in 10/26.

At the next TOPIX rebalancing in 10/26, and eligibility will be determined mainly by two criteria:

1) The annual trading value turnover ratio, and
2) The cumulative ratio of free‑float market capitalization.

Companies that fail to meet the criteria will see their TOPIX weighting gradually reduced to 0% over eight quarterly steps starting from October 2026.

Because of this, companies with market capitalizations of roughly ¥40–70 billion—those near the borderline for remaining in TOPIX and particularly at risk of failing criterion (2)—are likely to begin taking more shareholder‑return‑focused, stock‑price‑conscious actions, such as strengthening IR activities.

This should fuel IR support division of LMI since it specializes in helping companies articulate their Human Capital Management—a key component of Integrated Reports that investors now demand.

LMI also leverages its “Motivation Cloud” data to demonstrate workforce productivity to investors. Smaller companies facing potential delisting use these metrics to differentiate themselves and highlight their “intangible value” to skeptical fund managers.

I sent a note outlining the key weaknesses raised and the company’s responses. If you’re interested in receiving that note—or any of the other analyses I produce—I’d ike to invite you to try my service completely free of charge. I’m confident that once you experience the value, clarity, and convenience I provide, you’ll be glad you gave it a try. Even clients with their own dedicated Japan research teams often tell me that my perspective is uniquely insightful and highly actionable.

LinkNMotivation LMI MotivatioCloud Motivatincloudbasic HCM HumanCapitalMgt Topixrebalance