Tokyo Stock Exchange and Nowcast to commence PoC testing on mid/small cap stock analyst reports

Maria Nikolova

The purpose is to check whether such reports could offer new investment opportunities.

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Nowcast Inc., a subsidiary of Finatext Holdings Ltd., and Tokyo Stock Exchange, Inc. are set to commence Proof of Concept (PoC) testing under the Proof of Concept Program for Utilizing Securities Data on limited public distribution of mid/small cap stock analyst reports in English by using alternative data.

The purpose of the PoC, which is scheduled to begin in November 2019, is to check whether distributing reports could propose new investment opportunities. Initially, the distribution of reports to participants will be for three months.

TSE explains that there is a demand for reports in English in order to ensure information disclosure to overseas institutional investors and to allow for cross-referencing across the globe. However, analysts’ coverage of small and medium cap stock is relatively smaller in volume compared to that of large caps.

With the aim of solving these problems, Nowcast and TSE will start providing analyst reports that use alternative data. Nowcast will write the reports and take advantage of natural language processing and the knowledge of analysts to compose a large number of reports. This is set to help address the problem of qualitative and quantitative lack of English information on mid/small caps.

In this PoC, Nowcast will use alternative data and pick up listed companies that are likely to get attention from investors. Nowcast will automatically generate English reports with short comments about the selected companies based on financial statements and other relevant materials disclosed by said companies. In addition, for stocks that are considered to be of high interest to investors, detailed reports will be drafted separately and provided to the participants.

In order to prepare English reports, Nowcast will also utilize the machine translation engine that is under research and development by JPX.

Those interested in participation in the PoC are encouraged to contact Service Development Group, Information Services, Tokyo Stock Exchange, Inc. via e-mail: [email protected]

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