OSAKA — Nasdaq Japan, Japan’s version of the tech-heavy U.S. Nasdaq market, celebrated its launch Monday morning with three of its four startup issues closing above their initial public offering prices.
The four IPOs — computer systems provider Xnet Corp., computer software developer Digital Design Co., drugstore Sugi Pharmacy Co. and job agency Creek & River Co. — are among eight companies that debuted on the new bourse on its opening day.
Sugi Pharmacy Co. scored a maximum permissible single-day gain to close at 9,000 yen against its public offering price of 7,000 yen. Computer systems developer Xnet Corp. ended at 5.75 million yen against 5.5 million yen and Digital Design Co. was at a bid price of 2 million yen, against 1.5 million yen, after trading at the day’s high of 1.8 million yen.
Visual and multimedia content producer Creek & River Co., however, finished at 3.48 million yen, lower than its public offering price of 3.5 million yen despite rising as high as 3.6 million yen.
“This is a peaceful start,” a market source said.
Two of the other four newcomers — Digicube Co. and Internet service provider Masternet Co. — defected to Nasdaq Japan from the over-the-counter market, a rival operated by the Japan Securities Dealers Association. Car dealer Honda Verno Tokai Co. and discount store chain Don Quijote Co. have listed on both bourses.
Masternet Co. closed at 1.65 million yen, down from Friday’s OTC close of 1.95 million yen, after remaining ask-only for most of the day. Digicube Co. ended at 2.8 million yen, down from 2.85 million yen.
While turnover of Don Quijote Co. was greater on the second section of the Tokyo Stock Exchange than on Nasdaq Japan, volume was bigger on Nasdaq Japan for Honda Verno Tokai Co., also listed on the second section of the Nagoya Stock Exchange.
Don Quijote closed at 15,390 yen on Nasdaq Japan, unchanged from Friday’s close on the TSE. On the TSE, it ended at 14,800 yen.
Honda Verno finished at 1,349 yen on Nasdaq Japan against Friday’s NSE close of 1,305 yen.
Despite speculation that the new market would be affected by the latest dip in U.S. stocks, the eight shares proved resilient.
On Friday, the Dow Jones industrial Average ended down 2.48 percent at 10,449.30. The Nasdaq composite index managed to climb 0.39 percent to 3,860.56.
Nasdaq Japan, capitalized at 600 million yen, is owned by Softbank and the U.S. National Association of Securities Dealers, which each hold 50 percent stakes.
But its effective joint founders are NASD, the parent of the U.S. Nasdaq market, and the chiefs of Digital Design. Both were on hand to celebrate Nasdaq Japan’s inauguration.
“We will try to be a business enterprise that can live up to the principles of the Nasdaq market — being free, fair and global,” said Digital Design President Kazuhiko Terai at a ceremony before trading began at 9 a.m.
Frank Zarb, the chairman of NASD, said the founders will try to make the new exchange important to the Asian market.
Zarb also said that Nasdaq Japan will be linked with the U.S. Nasdaq and European stock markets in just over a year.
Softbank and NASD have said the bourse will be eventually linked with Nasdaq-Europe, its planned European peer, and the U.S. Nasdaq market, based on a 24-hour trading structure.
The eight newly listed firms on Nasdaq Japan will be joined by 10 more companies, seven of them Softbank group firms. These include Morningstar Japan K.K., E*Trade Japan K.K., and Softbank Frontier Securities Co.
Morningstar will makes its debut on Friday.
Whether the new market will fare well as a fundraising venue for cash-hungry venture businesses is being watched by startup firms and industry bodies that group brokerages.
According to market research agency Teikoku Databank, 162 firms plan to go public in 2000 on Nasdaq Japan, the OTC market, or Mothers, a bourse recently set up by the Tokyo Stock Exchange. An additional 200 envision a debut in 2001.
The three hold high hopes of wooing cash-strapped venture businesses, with their own income dependent on a range of commissions and fees.
Nasdaq Japan is located on the premises of the Osaka Securities Exchange, which boasts an advanced computerized trading system.
Mothers, Nasdaq Japan’s chief rival, made a dramatic debut in December by offering the shares of two Internet-related companies.
One of the two shares — Internet Research Institute — fetched 53 million yen, or 4.5 times its IPO of 11.7 million yen, within eight days of its debut.
But Mothers, which stands for “market for high-growth and emerging stocks,” took a hammering following the staggering 355.49-point drop in the U.S. Nasdaq’s main composite index on April 14.
Although the number of listed companies on Mothers soon increased to 10, most of the issues now trade below their initial prices.
As a result, many investors are questioning its listing requirements, securities analysts say.
“Unless brokerages examine the profitability and creditworthiness of the startups whose shares they are underwriting for debut on Nasdaq Japan, they will see their own prestige decline,” said Kazumasa Niimi, senior analyst at Japan Research Institute, a research arm of Sumitomo Bank.
Nasdaq Japan’s other rival,the OTC market, also took a beating from the April 14 drop on the New York Stock Exchange.