Nasdaq Japan firms get pitches from TSE, Jasdaq

by

The Tokyo Stock Exchange and the Jasdaq over-the-counter market are cranking up their efforts to attract companies listed on the Nasdaq Japan market, which will continue to operate even after it loses the Nasdaq name later this year.

Jasdaq Market Inc., which operates a 931-issue market, may simplify its listing procedures in a bid to boost transfers of shares listed on Nasdaq Japan.

Jasdaq Market and the managers of applicants could effectively halve the current five-month screening period, according to Jasdaq officials.

The plan emerged after the TSE relaxed its listing criteria Oct. 1.

Promising firms that are expected to boost the value of their total shares to more than 100 million yen at listing are now allowed to join the TSE — even if they are operating in the red.

Brokerage officials say this maneuver represents a threat for Jasdaq, with the TSE having effectively started luring those listed on the Jasdaq market in addition to Nasdaq Japan-listed firms.

As of Oct. 1, 103 companies were listed on the Nasdaq Japan market.

Market observers suspect several firms will abandon the bourse following the withdrawal of Nasdaq Stock Market Inc. of the United States, fearing that the move will hinder exposure and global trade of their shares.

Nasdaq Japan Inc., a Nasdaq unit scheduled to be liquidated in late November, and the Osaka Securities Exchange, which operates the Nasdaq Japan market, will terminate their alliance Oct. 15.

The market will continue to operate under the same name until it becomes known as the Hercules market on Dec. 16.

Listed firms such as Starbucks Coffee Japan Ltd. have stated that they are studying “all possible options” regarding future involvement in the Nasdaq Japan market.

Others, including staffing agency Pasona Inc., have stated their intention to stay listed on the market “for the time being” to monitor how the market develops after Nasdaq’s withdrawal.

According to a recent poll conducted by the Nikkan Kogyo Shimbun, an industrial newspaper, around a quarter of the firms listed on the Nasdaq Japan market are considering alternatives.

Of 96 firms that responded to the survey, 23 said they may move to other markets.

Sixty-five firms said they plan to stay but will make final decisions after seeing how the market develops.

A senior TSE official said the bourse is trying to lure Nasdaq Japan-listed firms through various channels, including their lead managers.

“They can join us according to their size and capital, ranging from the first section to the second section and the Mothers market for startup companies,” said the official, who asked not be named.

As of Oct. 1, the TSE had 1,496 listed firms on its first section, 568 on its second section and 37 on the Mothers market.

Nobuyuki Horiuchi, manager of the General Affairs Department at Jasdaq Market, said 48 Nasdaq Japan-listed companies are now eligible to be listed on the Jasdaq exchange.

“Some 24 Nasdaq Japan-listed firms with large market capitalization are now showing interest in joining Jasdaq,” he said.

Nevertheless, many of the Nasdaq Japan-listed firms are ultimately thought to want to list their stocks on the TSE’s first section.

Geo Corp., an Aichi Prefecture-based firm that sells and rents audiovisual products, said it will stay on the Nasdaq Japan market until it makes itself eligible for the TSE.

“We first must grow our company by increasing profits and boosting exposure in the market, so that trading volume of our shares will increase,” Geo spokesman Takeo Itami said. “Our prime goal is to have the firm listed on the TSE’s first section.”