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24 July 2004

Types of financial translation

• Investor relations (IR)
  —materials such as annual reports and quarterly releases for companies
• Fixed-income
  —translation of research on bonds and other fixed-income products and markets
• Foreign exchange (forex)
  —ditto for forex markets
• Macroeconomic reports
• Internal documents and PR for financial institutions
• Materials for the BOJ, MOF, FSA, etc.
• Equity research translation!!

Equity research translation

• What is it?
  – Research about stocks
• Who puts it out?
  – Sell-side securities companies
• Who reads it?
  – Buy-side institutional investors
• Who translates it?
  – In-house and freelance translators in Tokyo and worldwide

Producers: securities companies

• Japanese: The wholesale or research arms of the major Japanese brokerage houses
  – i.e., Nomura, Daiwa, Nikko, and Mizuho
  – Middle-tier and smaller securities companies translate very little, if any
• Foreign: Major global securities houses with operations in Tokyo
  – e.g., Deutsche Bank, Goldman Sachs, Morgan Stanley...

Consumers: institutional investors

• Institutional investor = “A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions” (www.investopedia.com)
  – Examples: Mutual funds, investment trusts, pension funds, and insurance companies
  – Specifically, the main readers are (1) buy-side analysts and fund managers within institutional investors, and (2) the sell-side staff dealing with them

Content (1): topic

• Equity research proper (fundamental analysis)
  – analysis of individual companies and industrial sectors; specific Buy/Sell recommendations; 80–90% of total
• Strategy
  – broader stock market analysis; top-down approach
• Quantitative analysis
  – highly technical mathematical and statistical analysis to yield Buy/Sell recommendations
• (Macroeconomic)
  – not really equities; research on the economy in general, may not be tied specifically to stocks

Content (2): format

• Dailies / morning memos
  – 1–2 A4 pages; avg. 1000 characters; tight turnaround
• Long reports
  – 3-30 pages of text and exhibits; slightly longer turnaround, but next day to one week
• Presentation materials
  – annoying; rarely outsourced; lower priority
• Miscellaneous
  – e-mails, speeches, press releases, etc.

In-house vs. freelance

Japanese vs. foreign house

Demand hierarchy

• Accuracy
  – Must above all be factually correct, including numbers, proper names, and investment/valuation concepts
• Reliability (speed)
  – A very close second. Product shelf life is short and deadlines are tight
• Quality of writing
  – Must be understandable. Concise, natural-sounding English preferred, but this is not great literature.
• Price
  – The cheaper the better, but premium paid to meet other demands

Brief list of recommended resources

Print periodicals

Japan Company Handbook (Toyo Keizai)
日本経済新聞（日経金融新聞、日経産業新聞、日経MJ 流通新聞…）
Asian Wall Street Journal, Financial Times, WSJ...
Business Week, Forbes, Economist, Fortune...
日経ビジネス、週間ダイヤモンド、東洋経済、プレジデント...

Online

Nikkei Net <www.nikkei.co.jp> (日本経済新聞articles in J)

Nikkei Net Interactive <www.nni.nikkei.co.jp> (E articles, including translations of 日本経済新聞
articles and some from 日経金融新聞, 日経産業新聞, and maybe 日経MJ 流通新聞; paid
registration required {2-4 week free trial avail.})

Investopedia <www.investopedia.com> (E-E financial glossary, articles, tutorials, etc.)

The Motley Fool <www.fool.com> (down-to-earth articles and info on investing and personal finance;
free registration required)

Merrill Lynch Global Research Highlights <www.ml.com/researchmarketing/content/globalhights.pdf>
(Weekly publication {free distribution now delayed one month} reviewing strategy, economy, and individual company/sector investment opinions; highly recommended to gain sense of authentic English equity research)

Multex investor reports < http://cnnfn.investor.reuters.com/reports.aspx> (One free equity report per day, mostly from smaller securities firms; free registration required; click on Research Reports>Free Reports)

Silicon Strategies <www.siliconstrategies.com> (Latest information on semiconductor-related technology and market trends; free registration required)

Forbes <www.forbes.com> (some articles only accessible with free registration)

Various company annual reports and other IR materials online

Broadcast

Morning Business Satellite (TV Tokyo, weekdays 5:45-6:35)

Textbooks

Financial Markets and Institutions, by Frederic S. Mishkin & Stanley G. Eakins

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