Hitoshi Ishii business plan

My plan will make a proposal to set up a new finance company in Tokyo (or Nagoya).

The basic theory of my project is to ask for the credit risk of the stock (default risk).
Since the credit risk of bonds is understood in the market, it is possible to compare the price of stocks and bonds.
I will explain how to obtain the credit risk of the stock.

Example

The stock option
Type： An American-type put option
Stock prices： 100 yen
Number of put stocks： 1 stocks 　
Period： One year　
Strike price： 100 yen (At The Money)
Knock in price： 1 yen (Assuming default time)
Default time settlement ： 100 yen (99 yen to be exact）
Premium： 1 yen

Default ratio: 1/100=1%

General formula

The stock option
Type： An American-type put option
Stock prices： E
Number of the put stocks： X
Period： Te
Strike price： E (At The Money)
Knock in price： 1 yen (I assume default time)
Default time settlement ： EX
Premium： Pe
Default ratio: Pe/EX

Arbitrage can be done compared to the credit risk of the bond if the credit risk (default probability) of the stock is obtained.
However, in addition to simply doing arbitrage, we also planned to set up a company using this theory.
We will utilize the credit risk of shares (known as Ishii Index). Although I will name Ishii Index Inc. for the time being, it is a tentative name to the last.

1.Ishii Holdings Co., Ltd.

Financial holding company. I will oversee the following companies.

2. Ishii Index Co., Ltd.
Display the stock credit risk (Ishii index) as an index. Investor's investment decisions are used as indicators of credit risk instead of credit rating of rating agencies. Unlike rating agencies, we do not include subjectivity or judgment at all, and we calculate credit risk for each individual company based on information obtained from the stock market. The target is shares listed on the world. Revenue will be provided for a fee to display the index. You can display a toll screen on the Internet's homepage. If the price is 100,000 yen per month, assuming that the number of contracts is 10,000 people, the income will be 1 billion yen a month. (I think that the actual number of contractors is more.)

3.Ishii Index Exchange Co., Ltd.

The stock exchange rate (theoretical stock price) is calculated from each corporate bond, and the actual stock price and the theoretical stock price are compared, thereby providing investment judgment materials for stocks and bonds. Revenue is a screen that displays the theoretical stock price and the actual stock price is provided for a fee.

In addition, a market for buying and selling the theoretical stock price will be created. It is an image like an interest rate futures market.
The trading method is as follows. My proposal is a market which trades the theoretical value of stock price calculated from each corporate bond. The price (interest rate) of each corporate bond and the value of the corresponding stock price are equal.

For example, if a corporate bond holder wishes to hedge a bond price decline, it is easy to sell corporate bonds, but it can hedge even if the theoretical shares (of the market I propose) are sold while holding corporate bonds. If it is a method of selling the theoretical stock, the hedge ratio is dynamically determined, and if you want to restore it, you can easily do so by buying back the theoretical stock. It can be used for risk hedging of owned assets, and the principle is the same as credit derivative. In the case of credit derivatives, it becomes a macro hedge, but in this case, it is possible to micro hedge corresponding to each corporate bond. Conversely, if you want to increase the assets you own, you can buy theoretical stock if you buy it. Leverage transaction is possible, the principle is the same as credit derivatives.

Also, if you simply want to take risks and earn revenue, trading of theoretical stock is trading credit risk.
In the case of arbitrage focusing on the difference between the credit risk of bonds and stocks, it is also possible to sell in-kind stocks and bonds, but it is also possible to sell and buy shares focusing on the spread between in-kind stocks and theoretical stocks. Common arbitrage deals in the direction in which the spread narrows.
In this way, the market I proposed suggests transactions that derive from in-kind transactions, which is nothing but a derivative transaction.
The target is stocks and bonds listed on the world. Countless transactions occurred all over the world and the total number of contracts for the whole transaction can not be counted. The revenue is the transaction fee per transaction, and I think that the fee should refer to the financial futures market etc. This market will access the world from Tokyo and receive orders from market participants all over the world on a 24-hour basis. You can create a market on the Internet and make it a net transaction.

4. Convertible bonds, warrant bonds, theoretical value display company

By calculating the theoretical price of convertible bonds and warrant bonds and comparing them with actual prices, we provide materials for making investment decisions. Revenue provides a screen that displays the theoretical and prevailing prices of convertible bonds and warrant bonds for a fee.

For the calculation method of the theoretical price of convertible bonds, for example, in the case of a stock price of 100 yen conversion price 110 yen, calculate the option fee of American type, with a 110 yen knock-in option, with the sale of a call option of 100 yen. Bonds with lower interest rates by the option fee will be the theoretical price (convertible bond) 's theoretical price (interest rate). Calculating the theoretical price of convertible bonds and warrant bonds is the world's first attempt and it is epochal.

5. Ishii Asset Management Co., Ltd.
Plan and sell investment trust products using transactions of Ishii index exchanges. Arbitrage products which compared stocks and bonds are basic. Bonds and stocks with different periods in the same company, and bonds and stocks with different countries traded in the same company, etc., make various products and compose products. Sales are made through banks and securities companies all over the world. I would like to consider internet sales as well.

7. Ishii Risk Advisory Co., Ltd.
If we can compare the value of stocks and bonds, we can also consider optimizing capital structure. In other words, it will be possible to identify the optimal capital structure that maximizes the total market value of the company. For example, if a company raises funds, if it can be determined that the price of bond issuance is less expensive than the stock price, the possibility that the value of the company will be raised if he / she generates debts by issuing bonds rather than raising capital Come out. Although we have compared past corporate value with stock market capitalization, we propose here the maximization of asset value by optimizing capital structure. I would like to propose it as a model to evaluate new corporate value.

8. Other
The Basel Banking Supervision Committee, which is making BIS regulations, has set a measure of the amount of risk for each rating category as a credit risk measurement method. However, unlike credit rating agencies, stock credit risk (Ishii Index) calculates credit risk for each individual company based on information obtained from the stock market without any subjectivity or judgment. I would like to propose that Ishii Index be adopted as a measure of credit risk in BIS regulation. If it could be realized, the attention to the Ishii index would be dramatically increased, and there is no doubt that it could contribute to improving the performance of Ishii Holdings.
Regarding the evaluation method of corporate value, in order to propose maximization of asset value through optimization of capital structure in addition to total market capitalization, I would like to consider services that publish the asset value of each company. If the maximization of asset value is one of the indicators of management policy, the usefulness of Ishii index will be significantly increased.

If you are interested in my business plan, please contact me. Thank you.

Name: Hitoshi Ishii

Address: 5-32-19 Imaike, Chikusa-ku, Nagoya, Japan

E-Mail: hi0815@goo.jp