Nomura Japan Equity High Dividend 70 Market
Neutral Index

Global Markets Research
17 June 2022

EQUITY: EQUITY QUANTITATIVE RESEARCH (INDEX)

Index rulebook
Nomura Japan Equity High Dividend 70 Market Neutral Index
The Nomura Japan Equity High Dividend 70 Market Neutral Index reflects theperformance of a market-neutral strategy involving a combination of long positions in the
Nomura Japan Equity High Dividend 70, Total Dividend Weighted (the "underlying index")
with short positions in TOPIX futures. Index values are calculated from the difference
between the return on the underlying index and the beta-adjusted return on TOPIX
futures.

Research Analysts
Japan index products
Index Operations Dept. - NSC
idx_mgr@jp.nomura.com

The hedge ratio used for hedging with TOPIX futures is adjusted on a daily basis to reflect
the beta of the underlying index versus the TOPIX (including dividends).
Index characteristics• The index reflects the performance of a market-neutral strategy involving longpositions in the Nomura Japan Equity High Dividend 70, Total Dividend Weighted andshort positions in TOPIX futures.
• It was designed to enable investors to achieve highly stable income gains andinvestment efficiency (return/risk) regardless of market fluctuations via a high dividend
yield strategy hedged against Japanese equity market risk.
• Daily adjustment of the TOPIX futures hedge ratio makes it possible to hedge against
Japanese equity market risk with a high degree of precision.

Production Complete: 2022-06-17 07:11 UTC

See Appendix A-1 for analyst certification, important disclosures and the status of non-US analysts.

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Table of contents
1. Index calculation
1.1. Market-neutral index values
1.2. Index announcement start date and index base date
2. Overview of underlying index
3. Selection of stocks in underlying index
3.1. Stock selection universe
3.2. Stock selection method[4]4. Periodic reconfigurations of underlying index
4.1. Periodic reconfiguration date
4.2. Periodic reconfiguration base date
4.3. Number of shares included in index for each component stock
4.4. Announcement of periodic reconfigurations
5. Unscheduled reconfigurations of underlying index
5.1. Response to stock swaps, stock transfers, mergers, etc
5.2. Removal of stocks
6. Maintenance of underlying index
6.1. Adjustment of base market cap
6.2. Index maintenance
7. Data publication services
Appendix A-1

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1. Index calculation
1.1. Market-neutral index values
This market-neutral index reflects the performance of a market-neutral strategy involving
a combination of long positions in the Nomura Japan Equity High Dividend 70, Total
Dividend Weighted (the "underlying index") with short positions in TOPIX futures. It is
calculated from the difference between the return on the underlying index and the betaadjusted return on TOPIX futures. The hedge ratio used for hedging with TOPIX futures isadjusted on a daily basis to reflect the beta of the underlying index versus the TOPIX(including dividends).
Returns on TOPIX futures are usually calculated using closing prices on the front-monthcontract, but this is rolled over to the second-month contract two business days before(after the close of trading three business days before) the settlement (SQ) date for tradesin the front-month contract.
The index construction rules, including rules for the selection of stocks in the underlying
index, are set out below. In addition, in calculating values for the underlying index, basemarket capitalization is adjusted in order to ensure that the index is not affected byfluctuations in share prices or market capitalization that do not reflect changes in market
conditions[1] .
1.1.1. Calculation of values for market-neutral index excluding dividends

However,1.

Note: In Sections 1.1.1 and 1.1.2, “adjusted market cap” is calculated by adjusting market capitalization forchanges in market capitalization that are due to changes in the capital structure of component stocks of theunderlying index or to changes in the component stocks of the underlying index. “Adjusted total dividends” iscalculated by adjusting total dividends to reflect cases where the dividend forecast differs from the actual
dividend.

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1.1.2. Calculation of values for market-neutral index including dividends

However,

Method for reflecting dividends in calculation of returns (including dividends) on
underlying index
In the calculation of returns on the underlying index (including dividends), dividend data isreflected on the ex-dividend date. However, because the value of the dividend has not yet
been determined on the ex-dividend date, the dividend forecast is used on the exdividend date[2] . Subsequently, in the event of a difference between the dividend forecast
and the actual dividend, the base market capitalization is adjusted on the last business
day of the month of the company's earnings announcement or the last business day of
the following month if the company's earnings announcement falls on the last business
day of the month. In addition, if dividend adjustment is required, the base market
capitalization is adjusted on the last business day of the month in which this became clear(if the day on which this became clear is the last business day of the month, the basemarket capitalization is adjusted on the last business day of the following month).

1.2. Index announcement start date and index base date
The index base date and index announcement start date are as follows.
Base date (= base value)

Index announcement
start date

Underlying index

29 Dec. 2000 (base value = 10,000)

30 Oct. 2014

Market-neutral index

31 Jan. 2002 (base value = 10,000)

15 Nov. 2017

Index

Index values prior to the index announcement start date are calculated for reference
purposes using the rules at the time.
2.

These rules are in effect from the period ending end-December 2011 onward. For periods before this, weused actual dividends as of ex-rights day.

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2. Overview of underlying index
The Nomura Japan Equity High Dividend 70, Total Dividend Weighted (the “underlying
index”) is an index designed to enable investors to realize a high dividend strategy
through passive investment.
Characteristics of underlying index••••

Total dividends used to determine component stock weights
Stocks are screened for DOE (total dividends/shareholders’ equity)
Index design considers stronger focus on investability
Focuses on total returns for long-term investors

Fig. 1: Composition of Nomura Japan Equity High Dividend 70, Total Dividend Weighted

Common stock listed in Japan

Dividend sustainability andStock selection universe

Screening for highdividend yield stocks

Nomura Japan Equity High Dividend 70 ,Total Dividend Weighted

Stock screening criteria: (the following stocks are selected)● Actual recurring profits have not been negative in any of the past
three years● In top 85% in terms of free float–adjusted market cap● In top 500 in terms of average trading value over the past 60
days● Among stocks meeting above criteria, in top 2/3 in terms of
average DOE

Stock selection conditions:● The top 70 stocks in terms of current-FY dividend yield forecast are
selected● However, the rebalancing band method is used(priority is given to stocks already in index that rank from 51st to 90th)Component stocks are weighted on the basis of total dividend averages(as of reconfiguration base date, 5% weight limit)

Source: Nomura

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3. Selection of stocks in underlying index
3.1. Stock selection universe
The universe of stocks eligible for inclusion in the index, which we refer to as the stock
selection universe, includes the top 98% of all stocks listed on Japanese stock exchanges[3] in terms of free float–adjusted market cap as of 15 October in the year before theperiodic reconfiguration base date (or the business day before this if 15 October is a nonbusiness day; this is called the stock selection universe fixing date), out of all stocks listed
on Japanese stock exchanges as of end-March in the year before the periodic
reconfiguration base date (see Section 4.2 below). However, of the stocks that were listed
in or after April in the year before the periodic reconfiguration base date, those inapproximately the top 85% in terms of free float–adjusted market cap and newly merged
stocks are also included in the stock selection universe. Stocks that meet the following
criteria as of the reconfiguration base date are excluded.
Equities other than common stock
As a general rule, only common stock is included in the stock selection universe.
However, exceptions to this rule will be made if necessary.
Stocks assigned for delisting
Stocks designated as securities to be delisted are not included in the stock selection
universe.
Stocks under supervision
Stocks designated as securities under supervision are not included in the stock selection
universe.
TOB target companies
Stocks that are the targets of tender offers (TOB) may be excluded from the universe ofstock selection if and only if all of the following requirements are met:-the offer close date falls between the stock selection universe fixing date and theperiodic reconfiguration date;-the company conducting the tender offer plans to acquire all the outstanding shares inthe target company; and-the company conducting the tender offer is planning to acquire all of the stock of thetarget company in exchange either for money or its own stock and the target company
agrees to the offer.
Listed investment trusts/REITs
Foreign stocks
Stocks listed on foreign sections of Japanese exchanges or stocks regarded asoverseas companies are excluded, even if these stocks are traded in the Japanesemarket.
Other exceptions
Latent stocks, warrants, and rights on them are excluded. The Bank of Japan is also
excluded.

3.

Tokyo Stock Exchange (Prime Market, Standard Market, Growth Market, TOKYO PRO Market), Nagoya
Stock Exchange, Sapporo Securities Exchange, and Fukuoka Stock Exchange

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3.2. Stock selection method[4]Stocks are selected for the underlying index as defined in Section 3.1 above. A total of 70
stocks with a high current-FY dividend yield[5] are selected after taking into account thestock screening criteria and rebalancing band, as set out below[6] .
Stock screening criteria
These are rules aimed at limiting inclusion in the index of stocks for which there are
doubts about dividend sustainability and low-liquidity stocks such as those with a low free
float–adjusted market cap. Stocks that meet all of the following criteria on the periodic
reconfiguration base date (see Section 4.2 below) are eligible for inclusion in the index.
•
•
•
•

4.

5.

6.

7.

8.

9.

Actual recurring profits have not been negative in any of the past three years[7] .
In the top 85% in terms of free float–adjusted market capitalization[8] .
In the top 500 in terms of average trading value over the past 60 days.
Stocks are chosen from those that meet the above three criteria and that also rank in
the top two-thirds in terms of average DOE[9] .

The stock selection criteria may be revised at Nomura’s discretion in response to changes in the economic
situation, for example. In such a case, however, a revised rulebook would be published at least two weeks
before the periodic reconfiguration date.
The current-FY dividend yield forecast for each stock is calculated by dividing the expected dividend pershare (or the lowest expected dividend per share if a forecast range is given) for the accounting period thatis furthest away within 12 months after the month following the periodic reconfiguration base date by theclosing value of its Nomura composite share price on the reconfiguration base date. A stock’s Nomura
composite share price is its price on its primary exchange (the exchange that is judged to have the mostaccurate price for the stock, based on the percentage of days traded and trading volume over the previous
60 business days; as a general rule the primary exchange is selected on a daily basis). The share price isselected according to the following order of precedence.
Contract price on selected exchange (see note) > standard price on selected exchange > Nomura composite
share price on previous business day
Note: Priority is given to the special quotation price or continuous confirmed quotation price on the selectedexchange if these are available.
When the forecast dividend for the current fiscal year is confirmed as zero for a stock the business day
before the periodic reconfiguration announcement date but after the reconfiguration base date, the stock is
not included in the index and a replacement stock is used.
Actual recurring profits over the previous three years are calculated from full-year financial data up to theend of the month that is four months before the periodic reconfiguration base date. In terms of the financial
data used, priority is given to the latest IFRS accounts, followed in order by the latest Japanese GAAP
consolidated accounts, the latest US GAAP accounts, and the latest Japanese GAAP parent accounts. Net
profits before tax are used for recurring profits in the case of accounts based on IFRS and net profits before
adjustment for taxes, etc are used for recurring profits in the case of accounts based on US GAAP.
In order to reflect the number of shares that investors can actually invest in, we calculate the free
float–adjusted market capitalization as follows: Nomura composite share price × (shares outstanding forindex calculation purposes - stable shareholding). We estimate the stable shareholding as the number ofshares considered to be held on a stable basis, based on major shareholder data, declarations ofmarketable securities holdings included in securities reports, and data published by stock exchanges andcompanies (such as stock exchange releases and company prospectuses). Changes in the number ofshares are reflected in shares outstanding for index calculation purposes according to the timing of changes
in the capital structure of a component stock, shown in Figure 2.
DOE (dividend on equity) is total dividends divided by shareholders' equity and, together with dividend
payout ratio, is one yardstick used to assess shareholder returns. The average DOE used here is calculated
as follows: (forecast total dividends for current fiscal year ÷ actual shareholders’ equity for previous fiscal
year + actual total dividends for previous fiscal year ÷ actual shareholders’ equity for previous fiscal year +actual total dividends for two fiscal years ago ÷ actual shareholders’ equity for two fiscal years ago) ÷ 3.
Share buybacks, one way to boost shareholder returns, can be used to raise average DOE by lowering
shareholders' equity. In terms of the financial data used, priority is given to the latest IFRS accounts,
followed in order by the latest Japanese GAAP consolidated accounts, the latest US GAAP accounts, andthe latest Japanese GAAP parent accounts. Where no data is available, we use a value of zero. Where
shareholders’ equity is zero, we treat that fiscal year as having no data available.

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Rebalancing band
This rule is aimed at limiting frequent stock replacements caused by very small
differences in current-FY dividend yield forecasts. Stocks that meet the stock screening
criteria are selected for the index using the procedure set out below.
(1) The top 50 stocks in terms of current-FY dividend yield forecast on the periodic
reconfiguration base date are selected unconditionally.
(2) Stocks that rank from 51st to 90th in terms of current-FY dividend yield forecast (therebalancing band) and are already included in the index are then selected until a total of
70 stocks has been selected.
(3) If the total number of stocks selected in (1) and (2) above is less than 70, the shortfall
is made up by selecting stocks ranked from 51st onward in terms of the current-FY
dividend yield forecast that are not currently included in the index, in order of ranking[10] .

10.

When two or more stocks have the same current-FY dividend yield forecast, priority is given to the stock withthe larger free float–adjusted market cap.

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4. Periodic reconfigurations of underlying
index
4.1. Periodic reconfiguration date
Periodic reconfigurations take place once a year, on 10 February (i.e., after the close of
trading on the previous business day). When 10 February falls on a holiday, the periodic
reconfiguration takes place on the next business day.

4.2. Periodic reconfiguration base date
The periodic reconfiguration base date is 15 January of each year. Component stocks
and the number of shares in each component stock to be included in the index following
the periodic reconfiguration are determined on the basis of calculations using data as ofthe periodic reconfiguration base date. When 15 January falls on a holiday, the periodic
reconfiguration base date shall be the previous business day.

4.3. Number of shares included in index for each component
stock
A component stock is defined as one of the 70 stocks selected in accordance with Section
3.2 as of the periodic reconfiguration base date defined in Section 4.2.
4.3.1. Total dividend weight
Total dividend weight is defined as average total dividend of a component stock as apercentage of the total. Average total dividend is calculated as follows:
Average total dividend = (this year’s forecast total dividend + last year’s total dividend +year before last’s total dividend) / 3
In the absence of dividend data, we assume that the dividend is zero.
4.3.2. Component stock weight and weight limits
The weight of a component stock can be no greater than 5%. Component stock weight isdetermined by allocating the difference between 1 and the total of total dividend weightsof stocks with weights greater than 5% to other stocks in proportion to total dividend
weight.
4.3.3. Number of shares included in the index
The number of shares included in the index for each component stock is calculated sothat the weight of each of the 70 stocks selected as component stocks as of the periodic
reconfiguration base date is equal to the component stock weight defined previously. Thatis, the number of shares included in the index for each component stock as of the periodic
reconfiguration base date is calculated by dividing the product of the component stock
weight and a constant value[11] by the Nomura composite share price at the close of
trading on the periodic reconfiguration base date.

4.4. Announcement of periodic reconfigurations
As a general rule, the announcement of a periodic reconfiguration will appear on our
website around 16:00 (JST) 10 business days before the periodic reconfiguration date,
except in the event of unforeseen circumstances or when information cannot be
confirmed.

11.

The constant value in the case of this index is ¥1trn.

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5. Unscheduled reconfigurations ofunderlying index
5.1. Response to stock swaps, stock transfers, mergers, etc
Temporary exclusions of stocks from the index are avoided and the consistency of index
constituents is maintained based on the following rules.
5.1.1. Stock swaps and absorption-type mergers
When a stock is delisted because it is about to become a wholly owned subsidiary or bemerged into another company, it will continue to be included in the index after its delisting
but removed from the index on the listing change date (or on the following business day if
this is a non-business day). Following its delisting, the merged company's valuation isbased on the market value of the company that will become the parent company or thesurviving company multiplied by the exchange or merger ratio. Also, the index inclusion
ratio of the parent company or surviving company is changed on the listing change date(or on the following business day if this is a non-business day) based on the exchange ormerger ratio.
5.1.2. Stock transfers and consolidation mergers
When an unlisted parent company or surviving company in a merger (the “surviving
company”) assumes the operations of another company and becomes listed after a shortperiod of time, the merged company is removed from the index on the new listing date of
the surviving company (or on the following business day if this is a non-business day).
The price used for the delisted merged company is the price on the day before itsdelisting. Also, the surviving company is included in the index on its new listing date.
However, if the surviving company will not be included in the index after periodic
reconfiguration, the merged company is removed from the index on the delisting date.

5.2. Removal of stocks
5.2.1. Designation as securities to be delisted
Stocks designated as securities to be delisted are removed from the index four businessdays later (or on the following business day if this is a non-business day). However,stocks that are listed on more than one market and not designated for delisting on one ormore of the markets will not be removed.
5.2.2. Delisting
Stocks delisted for reasons other than those noted in Section 5.1 above will be removed
from the index on the delisting date.
5.2.3. Marked loss of eligibility for inclusion in stock selection universe
In the case of an event that is considered to damage seriously a component stock's
eligibility for inclusion in the stock selection universe as defined in Section 3.1 above, thestock may be removed from the index following an official announcement by the company
in question, the stock exchange, or a government/regulatory agency. However, after thestock has been removed from the index, if the reason for its exclusion has been
withdrawn as of the periodic reconstitution base date, it will no longer be regarded as
ineligible for inclusion in the stock selection universe.

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6. Maintenance of underlying index
6.1. Adjustment of base market cap
The base market capitalization is adjusted as below in the event of a change in capital
structure or in the component stocks of the index. However, no adjustment to base market
capitalization is made for changes in capital structure that do not involve payment, suchas stock splits, reverse stock splits, and changes to face value, as these do not affectmarket capitalization.
Fig. 2: Timing of adjustments resulting from changes in capital structure

Change in capital structure

Stock

Stock transfer, stock swap,
mergerAdjustment date
Date of listing change

Previous day's priceEx-rights date

Not used[12]Stock replacement

Replacement datePrevious day's price

Rights offering

Ex-rights dateIssue price

Gratis allocation of stockacquisition rights

Ex-rights date

Exercise priceCorporate divestiture
replacement (company/division spinoff)

Gratis allocation of treasury stock Ex-rights date

Capitalincrease

Previous day's price

Public offering

Business day following payment date (listing date of newPrevious day's priceshares when settlement is on issuance date)

Capital increase via third-party
placement

Five business days after date of listing change

Previous day's price

Conversion of preferred stock

Last business day of month in which number ofconverted shares becomes known

Previous day's price

Last business day of month in which number of newshares for which rights were exercised becomes known

Previous day's priceCorporate divestiture (new stock
in continuing company)

Date of listing change

Previous day's price

Retirement of treasury stock

Last business day of month following month of treasury
stock retirement

Previous day's price

Last business day of month in which rights offering
refusal is announced (or last business day of following
month if announcement is within five business days ofmonth-end)

Previous day's price

Capital reduction withcompensation

Effective datePrevious day's price

Other adjustments

Other adjustments to base market capitalization, if
required, are made on the last business day of the monthof the disclosure of the relevant information (or the last Previous day's pricebusiness day of the following month if the disclosure ismade within five business days of the month-end)

Conversion of CBs
Exercise of stock acquisition rights

CapitalRights offering refusal
reduction

Other

Share price used

Source: Nomura

12.

In the case of a corporate divestiture (company/division spinoff), the base market capitalization is adjusted
for the reduction in capital. Definitions of reductions in capital are as follows:(1) when the company does not announce the value of the divested division or of the shares of the divested
company: capital reduction = amount by which shareholders’ equity is expected to be reduced; and (2)when the company does announce the value of the divested division or of the shares of the divested
company: capital reduction = value of divested division or value of divested company’s shares × total
number of shares

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6.2. Index maintenance
Component stocks are replaced in periodic and unscheduled reconfigurations and whennecessary for other reasons. When the following changes in capital structure result in achange in the number of shares outstanding for index calculation purposes, the index
inclusion ratio is changed so that the number of shares in the stock that are included in
the index does not change.
•
•
•
•
•
•
•
•
•
•
•
•

13.

Stock transfer, stock swap, merger[13]Rights issue offering
Gratis allocation of stock acquisition rights
Public offering
Capital increase via third-party placement
Conversion of preferred stock into common stock
Exercise of CBS, exercise of stock acquisition rights
Corporate divestiture (new shares in continuing company)
Retirement of treasury stock
Rights offering refusal
Capital reduction with compensation
Other adjustments

When a wholly owned subsidiary (merged company) is an index component, thenumber of shares in the parent company (merging company) is adjusted to reflect
the exchange ratio (merger ratio).

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7. Data publication services
Nomura Japan Equity High Dividend 70 Market Neutral Index access points[14]Information on the Nomura Japan Equity High Dividend 70 Market Neutral Index is available on the following media:
Bloomberg:
NMRCMODD <Index> (Index excluding dividends, yen-denominated)
NMRCMIDD <Index> (Index including dividends, yen-denominated)
QUICK: NRIJ@
REUTERS:.NHYMN (Index excluding dividends, yen-denominated).NHYMNTR (Index including dividends, yen-denominated)
Our website: http://qr.nomura.co.jp/jp/nhdivdmn/index.html (Japanese only)

Contact
Global Research Division, Financial Engineering & Technology Research CenterIndex Operations Dept.
e-mail: idx_mgr@jp.nomura.com

The Nomura Japan Equity High Dividend 70 Market Neutral Index is released by Nomura
Securities Co., Ltd. ("Nomura") and its intellectual and all other rights belong to Nomura.
Nomura does not guarantee the accuracy, completeness, reliability, usefulness,marketability, merchantability, or fitness of the index, and does not take any responsibility
for business activities or services that any index user and/or its affiliates undertakes withthe use of the index.
A license agreement with Nomura is required to use the index and access detailed data.
In the case of an unavoidable event such as computer breakdown or natural disaster,
calculation of the indexes may be delayed or suspended.
While every effort is made to ensure that the information used in this report and all
published information is based on reliable data, it should be noted that data may bechanged or amended when necessary.
TOPIX related disclaimer
The TOPIX Index Value and the TOPIX Marks are subject to the proprietary rights owned
by JPX Market Innovation & Research, Inc. or affiliates of JPX Market Innovation &Research, Inc. (hereinafter collectively referred to as "JPX") and JPX owns all rights andknow-how relating to TOPIX such as calculation, publication and use of the TOPIX Index
Value and relating to the TOPIX Marks.
JPX gives no assurance regarding accuracy or completeness of the TOPIX Index Valueand data contained therein. Further, JPX shall not be liable for the miscalculation,
incorrect publication, delayed or interrupted publication of the TOPIX Index Value.
Nomura Japan Equity High Dividend 70 Market Neutral Index is not in any way
sponsored, endorsed or promoted by JPX, and JPX shall not be responsible for any
damage resulting from Nomura Japan Equity High Dividend 70 Market Neutral Index.

14.

Published data are all for reference only.

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Appendix A-1
Analyst Certification
I, Index Operations Dept., hereby certify (1) that the views expressed in this Research report accurately reflect my personalviews about any or all of the subject securities or issuers referred to in this Research report, (2) no part of my compensation
was, is or will be directly or indirectly related to the specific recommendations or views expressed in this Research report and (3)no part of my compensation is tied to any specific investment banking transactions performed by Nomura Securities
International, Inc., Nomura International plc or any other Nomura Group company.

Important Disclosures
The lists of issuers that are affiliates or subsidiaries of Nomura Holdings Inc., the parent company of Nomura Securities Co., Ltd., issuers thathave officers who concurrently serve as officers of Nomura Securities Co., Ltd., issuers in which the Nomura Group holds 1% or more of any
class of common equity securities and issuers for which Nomura Securities Co., Ltd. has lead managed a public offering of equity or equity
linked securities in the past 12 months are available at https://www.nomuraholdings.com/report/ . Please contact the Research Production
Operation Dept. of Nomura Securities Co., Ltd. for additional information.

Online availability of research and conflict-of-interest disclosures
Nomura Group research is available on www.nomuranow.com/research, Bloomberg, Capital IQ, Factset, Reuters and ThomsonOne.
Important disclosures may be read at http://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx or requested
from Nomura Securities International, Inc. If you have any difficulties with the website, please email grpsupport@nomura.com for help.
The analysts responsible for preparing this report have received compensation based upon various factors including the firm's total revenues, aportion of which is generated by Investment Banking activities. Unless otherwise noted, the non-US analysts listed at the front of this report are
not registered/qualified as research analysts under FINRA rules, may not be associated persons of NSI, and may not be subject to FINRA Rule
2241 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account.
Nomura Global Financial Products Inc. (NGFP) Nomura Derivative Products Inc. (NDP) and Nomura International plc. (NIplc) are registered with
the Commodities Futures Trading Commission and the National Futures Association (NFA) as swap dealers. NGFP, NDPI, and NIplc are
generally engaged in the trading of swaps and other derivative products, any of which may be the subject of this report.

Distribution of ratings (Nomura Group)
The distribution of all ratings published by Nomura Group Global Equity Research is as follows:
56% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a Buy rating; 38% of companies with thisrating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in the EEA)
with this rating were supplied material services** by the Nomura Group.
41% have been assigned a Neutral rating which, for purposes of mandatory disclosures, is classified as a Hold rating; 60% of companies withthis rating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in the
EEA) with this rating were supplied material services by the Nomura Group
3% have been assigned a Reduce rating which, for purposes of mandatory disclosures, are classified as a Sell rating; 12% of companies withthis rating are investment banking clients of the Nomura Group*. 0% of companies (which are admitted to trading on a regulated market in the
EEA) with this rating were supplied material services by the Nomura Group.
As at 31 March 2022.
*The Nomura Group as defined in the Disclaimer section at the end of this report.
** As defined by the EU Market Abuse Regulation

Definition of Nomura Group's equity research rating system and sectors
The rating system is a relative system, indicating expected performance against a specific benchmark identified for each individual stock,subject to limited management discretion. An analyst’s target price is an assessment of the current intrinsic fair value of the stock based on an
appropriate valuation methodology determined by the analyst. Valuation methodologies include, but are not limited to, discounted cash flow
analysis, expected return on equity and multiple analysis. Analysts may also indicate expected absolute upside/downside relative to the statedtarget price, defined as (target price - current price)/current price.

STOCKSA rating of 'Buy', indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of 'Neutral',indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of 'Reduce', indicates thatthe analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of 'Suspended', indicates that the rating, target
price and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies
that are labelled as 'Not rated' or shown as 'No rating' are not in regular research coverage. Investors should not expect continuing or

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additional information from Nomura relating to such securities and/or companies. Benchmarks are as follows: United States/Europe/Asia exJapan: please see valuation methodologies for explanations of relevant benchmarks for stocks, which can be accessed at:
http://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx; Global Emerging Markets (ex-Asia): MSCIEmerging Markets ex-Asia, unless otherwise stated in the valuation methodology; Japan: Russell/Nomura Large Cap.

SECTORSA 'Bullish' stance, indicates that the analyst expects the sector to outperform the Benchmark during the next 12 months. A 'Neutral' stance,
indicates that the analyst expects the sector to perform in line with the Benchmark during the next 12 months. A 'Bearish' stance, indicates thatthe analyst expects the sector to underperform the Benchmark during the next 12 months. Sectors that are labelled as 'Not rated' or shown as'N/A' are not assigned ratings. Benchmarks are as follows: United States: S&P 500; Europe: Dow Jones STOXX 600; Global Emerging
Markets (ex-Asia): MSCI Emerging Markets ex-Asia. Japan/Asia ex-Japan: Sector ratings are not assigned.

Target Price
A Target Price, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part the analyst's
estimates for the company's earnings. The achievement of any target price may be impeded by general market and macroeconomic trends, andby other risks related to the company or the market, and may not occur if the company's earnings differ from estimates.

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Nomura | Nomura Japan Equity High Dividend 70 Market Neutral Index

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market maker is carried out in accordance with the definition given to it by specific laws and regulations of the US or other jurisdictions, this will
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This document may contain information obtained from third parties, including, but not limited to, ratings from credit ratings agencies such as
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Any MSCI sourced information in this document is the exclusive property of MSCI Inc. (‘MSCI’). Without prior written permission of MSCI, thisinformation and any other MSCI intellectual property may not be duplicated, reproduced, re-disseminated, redistributed or used, in whole or inpart, for any purpose whatsoever, including creating any financial products and any indices. This information is provided on an "as is" basis. The
user assumes the entire risk of any use made of this information. MSCI, its affiliates and any third party involved in, or related to, computing orcompiling the information hereby expressly disclaim all representations, warranties or undertakings of originality, fairness, accuracy,completeness, correctness, merchantability or fitness for a particular purpose with respect to any of this material or the information contained inthis material or otherwise arising in connection therewith. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any
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The intellectual property rights and any other rights, in Russell/Nomura Japan Equity Index belong to Nomura Securities Co., Ltd. ("Nomura")and Frank Russell Company ("Russell"). Nomura and Russell do not guarantee fairness, accuracy, completeness, correctness, reliability,
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Investors should consider this document as only a single factor in making their investment decision and, as such, the report should not beviewed as identifying or suggesting all risks, direct or indirect, that may be associated with any investment decision. Nomura Group produces a
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Figures presented herein may refer to past performance or simulations based on past performance which are not reliable indicators of future or
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assumptions which may oversimplify and not reflect the future distribution of returns. Any figure, strategy or index created and published forillustrative purposes within this document is not intended for “use” as a “benchmark” as defined by the European Benchmark Regulation.
Certain securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of, or income derived
from, the investment.
With respect to Fixed Income Research: Recommendations fall into two categories: tactical, which typically last up to three months; or strategic,
which typically last from 6-12 months. However, trade recommendations may be reviewed at any time as circumstances change. ‘Stop loss’
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This document has been approved by NIHK, which is regulated by the Hong Kong Securities and Futures Commission, for distribution in Hong
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Disclaimers required in Japan
Credit ratings in the text that are marked with an asterisk (*) are issued by a rating agency not registered under Japan’s Financial Instruments
and Exchange Act (“Unregistered Ratings”). For details on Unregistered Ratings, please contact the Research Production Operation Dept. of
Nomura Securities Co., Ltd.
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transactions involving Japanese equities are subject to a sales commission (all figures on a tax-inclusive basis) of up to 1.43% of the transaction
amount or a commission of ¥2,860 for transactions of ¥200,000 or less, while transactions involving investment trusts are subject to various
fees, such as commissions at the time of purchase and asset management fees, such as commissions at the time of purchase and asset
management fees (trust fees), specific to each investment trust).

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In addition, all products carry the risk of losses owing to price fluctuations or other factors. Fees and risks vary by product. Please thoroughly
read the written materials provided, such as documents delivered before making a contract, listed securities documents, or prospectuses.
Transactions involving Japanese equities (including Japanese REITs, Japanese ETFs, and Japanese ETNs, Japanese Infrastructure Funds)
are subject to a sales commission of up to 1.43% (tax included) of the transaction amount (or a commission of ¥2,860 (tax included) for
transactions of ¥200,000 or less). When Japanese equities are purchased via OTC transactions (including offerings), only the purchase priceshall be paid, with no sales commission charged. However, Nomura Securities may charge a separate fee for OTC transactions, as agreed withthe customer. Japanese equities carry the risk of losses owing to price fluctuations. Japanese REITs carry the risk of losses owing tofluctuations in price and/or earnings of underlying real estate. Japanese ETFs and ETNs carry the risk of losses owing to fluctuations in theunderlying indexes or other benchmarks. Japanese Infrastructure Funds carry out the risk of losses owing to fluctuations in price and/or
earnings of underlying infrastructures.
Transactions involving foreign equities are subject to a domestic sales commission of up to 1.045% (tax included) of the transaction amount(which equals the local transaction amount plus local fees and taxes in the case of a purchase or the local transaction amount minus local fees
and taxes in the case of a sale) (for transaction amounts of ¥750,000 and below, maximum domestic sales commission is ¥7,810 (taxincluded)). Local fees and taxes in foreign financial instruments markets vary by country/territory. When foreign equities are purchased via OTC
transactions (including offerings), only the purchase price shall be paid, with no sales commission charged. However, Nomura Securities may
charge a separate fee for OTC transactions, as agreed with the customer. Foreign equities carry the risk of losses owing to factors such as pricefluctuations and foreign exchange rate fluctuations.
Margin transactions are subject to a sales commission of up to 1.43% (tax included) of the transaction amount (or a commission of ¥2,860 (taxincluded) for transactions of ¥200,000 or less), as well as management fees and rights handling fees. In addition, long margin transactions are
subject to interest on the purchase amount, while short margin transactions are subject to fees for the lending of the shares borrowed. A marginequal to at least 30% of the transaction amount (at least 33% for online transactions) and at least ¥300,000 is required. With margintransactions, an amount up to roughly 3.3x the margin (roughly 3x for online transactions) may be traded. Margin transactions therefore carry
the risk of losses in excess of the margin owing to share price fluctuations. For details, please thoroughly read the written materials provided,such as listed securities documents or documents delivered before making a contract.
Transactions involving convertible bonds are subject to a sales commission of up to 1.10% (tax included) of the transaction amount (or acommission of ¥4,400 (tax included) if this would be less than ¥4,400). When convertible bonds are purchased via OTC transactions (including
offerings), only the purchase price shall be paid, with no sales commission charged. However, Nomura Securities may charge a separate fee for
OTC transactions, as agreed with the customer. Convertible bonds carry the risk of losses owing to factors such as interest rate fluctuations andprice fluctuations in the underlying stock. In addition, convertible bonds denominated in foreign currencies also carry the risk of losses owing tofactors such as foreign exchange rate fluctuations.
When bonds are purchased via public offerings, secondary distributions, or other OTC transactions with Nomura Securities, only the purchaseprice shall be paid, with no sales commission charged. Bonds carry the risk of losses, as prices fluctuate in line with changes in market interest
rates. Bond prices may also fall below the invested principal as a result of such factors as changes in the management and financial
circumstances of the issuer, or changes in third-party valuations of the bond in question. In addition, foreign currency-denominated bonds also
carry the risk of losses owing to factors such as foreign exchange rate fluctuations.
When Japanese government bonds (JGBs) for individual investors are purchased via public offerings, only the purchase price shall be paid, withno sales commission charged. As a rule, JGBs for individual investors may not be sold in the first 12 months after issuance. When JGBs forindividual investors are sold before maturity, an amount calculated via the following formula will be subtracted from the par value of the bondplus accrued interest: (1) for 10-year variable rate bonds, an amount equal to the two preceding coupon payments (before tax) x 0.79685 will be
used, (2) for 5-year and 3-year fixed rate bonds, an amount equal to the two preceding coupon payments (before tax) x 0.79685 will be used.
When inflation-indexed JGBs are purchased via public offerings, secondary distributions (uridashi deals), or other OTC transactions with
Nomura Securities, only the purchase price shall be paid, with no sales commission charged. Inflation-indexed JGBs carry the risk of losses, as
prices fluctuate in line with changes in market interest rates and fluctuations in the nationwide consumer price index. The notional principal of
inflation-indexed JGBs changes in line with the rate of change in nationwide CPI inflation from the time of its issuance. The amount of the
coupon payment is calculated by multiplying the coupon rate by the notional principal at the time of payment. The maturity value is the amountof the notional principal when the issue becomes due. For JI17 and subsequent issues, the maturity value shall not undercut the face amount.
Purchases of investment trusts (and sales of some investment trusts) are subject to a purchase or sales fee of up to 5.5% (tax included) of thetransaction amount. Also, a direct cost that may be incurred when selling investment trusts is a fee of up to 2.0% of the unit price at the time ofredemption. Indirect costs that may be incurred during the course of holding investment trusts include, for domestic investment trusts, an asset
management fee (trust fee) of up to 5.5% (tax included/annualized basis) of the net assets in trust, as well as fees based on investment
performance. Other indirect costs may also be incurred. For foreign investment trusts, indirect fees may be incurred during the course of holding
such as investment company compensation.
Investment trusts invest mainly in securities such as Japanese and foreign equities and bonds, whose prices fluctuate. Investment trust unit
prices fluctuate owing to price fluctuations in the underlying assets and to foreign exchange rate fluctuations. As such, investment trusts carry
the risk of losses. Fees and risks vary by investment trust. Maximum applicable fees are subject to change; please thoroughly read the writtenmaterials provided, such as prospectuses or documents delivered before making a contract.
In interest rate swap transactions and USD/JPY basis swap transactions (“interest rate swap transactions, etc.”), only the agreed transaction
payments shall be made on the settlement dates. Some interest rate swap transactions, etc. may require pledging of margin collateral. In someof these cases, transaction payments may exceed the amount of collateral. There shall be no advance notification of required collateral value or
collateral ratios as they vary depending on the transaction. Interest rate swap transactions, etc. carry the risk of losses owing to fluctuations inmarket prices in the interest rate, currency and other markets, as well as reference indices. Losses incurred as such may exceed the value ofmargin collateral, in which case margin calls may be triggered. In the event that both parties agree to enter a replacement (or termination)transaction, the interest rates received (paid) under the new arrangement may differ from those in the original arrangement, even if terms otherthan the interest rates are identical to those in the original transaction. Risks vary by transaction. Please thoroughly read the written materials

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provided, such as documents delivered before making a contract and disclosure statements.
In OTC transactions of credit default swaps (CDS), no sales commission will be charged. When entering into CDS transactions, the protection
buyer will be required to pledge or entrust an agreed amount of margin collateral. In some of these cases, the transaction payments may exceed
the amount of margin collateral. There shall be no advance notification of required collateral value or collateral ratios as they vary depending on
the financial position of the protection buyer. CDS transactions carry the risk of losses owing to changes in the credit position of some or all of
the referenced entities, and/or fluctuations of the interest rate market. The amount the protection buyer receives in the event that the CDS is
triggered by a credit event may undercut the total amount of premiums that he/she has paid in the course of the transaction. Similarly, theamount the protection seller pays in the event of a credit event may exceed the total amount of premiums that he/she has received in thetransaction. All other conditions being equal, the amount of premiums that the protection buyer pays and that received by the protection seller
shall differ. In principle, CDS transactions will be limited to financial instruments business operators and qualified institutional investors.
Transfers of equities to another securities company via the Japan Securities Depository Center are subject to a transfer fee of up to ¥11,000(tax included) per issue transferred depending on volume. No account fee will be charged for marketable securities or monies deposited.

Nomura Securities Co., Ltd.
Financial instruments firm registered with the Kanto Local Finance Bureau (registration No. 142)
Member associations: Japan Securities Dealers Association; Japan Investment Advisers Association; The Financial Futures Association ofJapan; and Type II Financial Instruments Firms Association.
The Nomura Group manages conflicts with respect to the production of research through its compliance policies and procedures (including, but
not limited to, Conflicts of Interest, Chinese Wall and Confidentiality policies) as well as through the maintenance of Chinese Walls andemployee training.
Additional information regarding the methodologies or models used in the production of any investment recommendations contained
within this document is available upon request by contacting the Research Analysts of Nomura listed on the front page. Disclosuresinformation is available upon request and disclosure information is available at the Nomura Disclosure web page:
http://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx
Copyright © 2022 Nomura Securities Co., Ltd. All rights reserved.

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