Nasdaq Japan June 19 Launch Nikkei Net comments:
Monday, May 8, 2000
Nasdaq Japan Set Up For June 19 Launch
TOKYO (Nikkei)--The Osaka Securities Exchange formally established Nasdaq Japan Monday and accepted applications for registration from eight firms. The market, a joint venture involving Softbank Corp. (9984), the National Association of Securities Dealers Inc. and the OSE, will kick off trading on June 19.
Nasdaq Japan will become the third domestic bourse for emerging companies, joining the over-the-counter market and Mothers, operated by the Tokyo Stock Exchange.
The new exchange will assess firms using one of two criterion sets -- "standard" or "growth." The standard criteria involve several prerequisites, including net asset requirements, earnings levels and market capitalization at time of registration. Criteria for the growth category are looser and were drawn up with start-ups in mind.
Digital Design Co. was the only company filing under the growth criteria Monday. The other seven firms recorded pretax profit and sales topping 1 billion yen in their latest business years and opted for the standard classification. Of the eight, two companies are looking to switch from the OTC market. In addition, one company each on the TSE and Nagoya Stock Exchange want to trade on Nasdaq Japan but maintain their current listings.
The firms vying for spots on Nasdaq Japan contrast starkly with those listing on Mothers, which was created in December. The companies on Mothers lean more toward the growth side of the equation, being start-ups with low or zero reported sales.
OSE executive Yoshiaki Sugio stressed the importance of strict listing standards at a press conference Monday. "Liquidity in the stocks registered for trade will be key to winning in the competition with other markets."
Tuesday, May 9, 2000
ANALYSIS: Nasdaq Japan Requires Open, Responsible Players
TOKYO (Nikkei)--The privately operated Nasdaq Japan stock market places a greater onus on investors, companies and securities houses to behave responsibly and openly in the market than do traditional exchanges more directly regulated by government.
The new market gives young, promising businesses the chance to raise funds needed to operate. However, some firms seek a listing just to secure enough money to survive.
Brokerages which act as lead managers for initial public offerings (IPOs) play an important role in screening companies planning new share issues. Despite this, Japan lacks an effective system to monitor subsequent share price movements and rate the screening ability of securities firms.
Because companies listing on Nasdaq Japan will likely issue a limited number of floating shares, wild fluctuations in stock prices are likely, as is the case with fast-growing newcomers trading on the Mothers market operated by the Tokyo Stock Exchange.
Delisting from the U.S. Nasdaq market is not unusual. U.S. investors commonly buy shares in Internet-related and other firms through mutual funds to avoid the risk associated with direct investment in start-ups whose potential is difficult to assess.
The use of mutual funds will also be important for the success of Nasdaq Japan and other bourses for emerging firms. No less important, according to a market researcher, will be giving individuals similar access to the information available to institutional investors.
Free from direct government influence, Nasdaq Japan is a high-risk market offering high-returns. The basic principles that should guide participants are thorough disclosure of information and responsible self-regulation. |
