Okinawa looks to galvanize professional-only stock market

JIJI

A program is under way in Okinawa that may bring new life to Tokyo Pro Market, a Tokyo Stock Exchange trading sector solely for professional investors.

The program is being led by Okinawa J-Adviser, founded recently by Okinawa Industry Promotion Public Corp. and local financial institutes to find promising local venture businesses to list on the market.

Tokyo Pro Market was launched in 2009 as Tokyo AIM at the prodding of Atsushi Saito, president of Tokyo Stock Exchange Group Inc.

Modeled after a trading system on the London Stock Exchange, Tokyo Pro Market allows only institutional and other professional investors to buy and sell shares listed via screening by TSE-designated entities known as “J-Advisers.”

The market features easy listing, disclosure and other requirements to make shares in a variety of growing companies available for trading.

But only three companies have so far been listed through Phillip Securities Japan Ltd., a Singapore-affiliated brokerage and one of only seven securities companies designated by the TSE as J-Advisers. Given persistently lackluster trading on the market, Saito has expressed his dissatisfaction.

Analysts note the market has stayed in the doldrums due largely to the lack of enthusiasm among major brokerages, which, though designated as J-Advisers, see it as unattractive in light of its limited fundraising possibilities and low liquidity of listed shares.

On Sept. 25, Okinawa J-Adviser applied to the TSE to serve as an adviser under Tokyo Pro Market program. If authorized as expected early this month, it will be the first adviser from outside the securities industry.

Wishing to avoid the conventional way of promoting startup companies based on subsidies, Okinawa J-Adviser has turned to Tokyo Pro Market to raise funds without strings attached.

Okinawa J-Adviser will find promising venture businesses in the prefecture and help them prepare for listing on Tokyo Pro Market. It will continue support to help them move up to the Mothers market for startups or the first or second section of the TSE.

Seiji Takayama, chief operating officer of Okinawa J-Adviser, said the discovery of good firms and meticulous support for them can only be provided by a locally based adviser. The small scale of fundraising possible on Tokyo Pro Market and the low liquidity of listed shares “do not necessarily adversely affect companies,” Takayama said.

In fact, a steak restaurant chain, expected to become the first Okinawa-based firm to debut on the market, is enjoying wide local publicity.

Okinawa J-Adviser plans to have two or three local companies listed on Tokyo Pro Market per year, arousing expectations that it will help stimulate trading on the market.

The Okinawa Prefectural Government hopes Okinawa J-Adviser will be one of the core players of a special financial zone in Nago where preferential tax treatment is available, aiming to promote the prefecture as a financial center of Asia in the future, sources said.

A TSE official said the initiative of Okinawa J-Adviser will hopefully stimulate similar moves in other regions. Some prefectural governments and businesses, including regional banks, have shown interest in the program.