FRANKFURT – Matsushita Electric Industrial Co., TDK Corp. and other Japanese blue chips are delisting from European stock exchanges due to low trading volume of their shares and deepening financial integration in Europe.
Matsushita said in late November it will leave the Euronext Paris Stock Exchange and the Duesseldorf Stock Exchange in Germany around April in a reassessment of its global listing structure.
The move followed the delisting of TDK from the Frankfurt Stock Exchange, the Euronext Paris, the Euronext Amsterdam Stock Exchange and the Zurich Stock Exchange.
The top maker of magnetic tapes and ferrites cited its cost-cutting efforts and low trading volume on the bourses.
TDK is among nine Japanese companies that withdrew from the FSE, one of the world’s biggest bourses, in 2003, when Tokyo share prices tumbled to 20-year lows before recovering some 40 percent.
As of late December, 36 Japanese companies were listed on the FSE, according to operator Deutsche Boerse AG, which runs the Xetra electronic trading platform connecting more than 300 financial institutions in 20 countries across Europe.
The figure is down from a peak of roughly 50 in 2000, but it is still higher than the 19 listed on the New York Stock Exchange and 22 on the London Stock Exchange.
“Many companies rushed for global listings in the 1990s in the hope of tapping the global capital market, and for many, especially smaller ones, that hope unfortunately did not materialize,” said Tom Kirchmaier, a lecturer in management at the London School of Economics and Political Science.
“I think it is a natural counterwave to consolidate listings and focus the attention on the most attractive ones,” he added.
Growing competition between the FSE and rivals LSE and Euronext was also behind the departure of the nine Japanese companies, according to analysts.
Investors believe bourses in European Union member states will consolidate as economic and financial integration increases on the continent.
Established in 2000, Euronext is a pan-European stock exchange that provides services for cash markets in Belgium, France, the Netherlands and Portugal, and for derivatives in Britain.
Some analysts speculate that Germany’s strict information disclosure and transparency requirements may have prompted the nine to leave the Frankfurt exchange, although the companies did not say so.
The eight others are Asahi Kasei Corp., Olympus Corp., Stanley Electric Co., Star Micronics Co., Taisei Corp., Taiyo Yuden Co., Minolta Co., which integrated operations with Konica Corp. in August, and Nissho Iwai Corp., which merged with Nichimen Corp. in April.
Kazuko Yamazaki, a strategist at Daiwa Institute of Research Ltd. in Tokyo, said some of the nine may have decided they would rather leave than comply with a German law that went into effect in July 2002 obliging listed companies to disclose remuneration for each director.
Japan lacks such a regulation, Yamazaki said.
She also said some firms may not have liked a rule that listed firms must notify Germany’s Federal Securities Supervisory Authority if their board members buy or sell shares in their companies.
Deutsche Boerse spokeswoman Candice Adam voiced hope that the ongoing global economic recovery will lead more Japanese companies to list on the FSE in 2004.
“The listing at FSE of Japanese and other Asian companies is important because FSE offers these companies attractive listing platforms and an extensive systems network that gives them international capital markets exposure,” Adam said.
Some experts say the key to drawing more foreign companies to Frankfurt and other European markets is spurring trading by institutional investors, the main sources of liquidity in any market.
This could be done in part by reforming continental Europe’s pension system to allow flexible use of pension funds in stock investment, as in Britain and the United States, Kirchmaier said.
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