It was reported earlier this month that Tata Motors Ltd., India’s largest automobile company, plans to debut on the Tokyo Stock Exchange this year.

Stock prices may be sluggish and the TSE may lag behind other bourses looking for global alliances, but Japan’s largest exchange final ly appears to be attracting more investors and companies, especially from Asia.

Following are questions and answers regarding the TSE:

When did the TSE start up?

The first pit trading for Japanese stocks started in 1878 in Tokyo’s Nihonbashi district, where the country’s main industries sprang from. There were few listed companies at the time, and the first was the exchange itself.

After briefly closing during World War II, the TSE resumed open trading in 1949. After the war, the exchange was run by a membership organization of brokerages and was no longer a stock company.

Like floor trading on exchanges in New York, Chicago and London, brokers and other professionals used hand signals for buying and selling stocks and futures. This practice ended in 1999 when trading turned electronic to speed up transactions and trim operating costs.

The trading pit was later renovated into a new hall called TSE Arrows, which boasts electronic stock price boards, TSE officials supervising transactions and open space for seminars and news conferences.

Computerization has not been without glitches. In November 2005, trading of all listed stocks briefly halted due to system trouble.

The following year, Mizuho Securities Co. could not cancel a mistaken sell order due to a glitch that prompted the president of the bourse to step down.

What other exchanges are there in Japan?

Osaka, Nagoya, Fukuoka and Sapporo also have exchanges, but they are smaller.

There is also the Jasdaq Securities Exchange Inc. for smaller businesses, located close to the TSE.

For startup companies, the TSE has the Mothers market and the Osaka Securities Exchange has the Hercules market.

What types of stock indexes are there on the TSE?

The most widely watched is the Nikkei 225 average, a price-weighted average of 225 issues. The issues are all major companies, and the composition is reviewed by the Nikkei financial daily every year.

Reflecting recent global bearishness, the Nikkei average has hovered around 13,000 in recent weeks. Its historic high — 38,915.87 — was marked in 1989 during the bubble economy.

When the economy entered a deflationary phase, the average fell into a long decline, touching a brief nadir of 7,607.88 in 2003.

Another major index is the Topix, or Tokyo Stock Price Index. It is a capital-weighted index of all issues on the TSE’s first section, which has more than 1,700 listed firms.

How many foreign companies are listed on the TSE?

There are 25, following the December exit of Volkswagen of Germany, which had been listed for nearly 20 years.

The number accounts for a mere 1 percent of the TSE’s 2,419 listed firms. That number is extremely low when compared with the New York Stock Exchange, where 15 percent of the listed firms are non-U.S.

The number of foreign firms on the TSE has fallen sharply from a peak of 127 in 1991, when the economy enjoyed a boom.

Many foreign blue chips, including Disney, McDonald’s and Procter & Gamble, at one time listed their shares to make their names familiar to Japanese investors. However, they withdrew from the TSE amid the economic slowdown and declining trading volumes. Those still listed include Boeing and UBS.

Did the TSE take action to stem the rise in delistings?

It did, although analysts still criticize the TSE’s lack of attractiveness.

One major reason for the departures is the high cost of listing, including that firms must issue annual reports on their earnings, based on Japanese accounting standards, in Japanese.

Last year, the stock exchange introduced trading of Japan Depositary Receipts, a Japanese version of American Depository Receipts.

JDRs are yen-denominated certificates issued by trust banks representing stocks of a foreign company listed on an overseas exchange. Investors trade JDRs just like Japanese shares.

The TSE, trying to stimulate overall trading, introduced JDRs to attract more Asian companies that want to raise funds in Japan. Some Asian economies, including Taiwan and India, limit listing of their companies on foreign bourses, analysts say. Tata plans to take the JDR route.

The TSE also opened an office in Beijing to attract more Chinese firms, but there has yet to be a rise in Asian companies listing on the bourse.

Is the TSE trying to form alliances with other exchanges?

Yes. In 2007, the TSE agreed with the NYSE to form a strategic alliance to cooperate in developing investment products, technology and services for investors and fundraisers.

The Tokyo bourse has not yet listed its shares since it became a stock company in 2001, and it has not formed capital tieups with any other stock exchanges.

But global alliances, meanwhile, are becoming much more dramatic.

In 2007, Euronext, a pan-European stock exchange based in Paris, merged with the NYSE to form the largest global exchange, NYSE Euronext.

Euronext itself started out in 2000 through a merger between the Amsterdam Stock Exchange, Brussels Stock Exchange and Paris Bourse.

In 2002, Euronext acquired shares of the London International Financial Futures and Options Exchange.

Meanwhile, the Borsa Italiana S.p.A., based in Milan, Italy, was privatized in 1997, and was acquired by the London Stock Exchange later that year.

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