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To: Boplicity who wrote (25921)	7/28/1999 10:56:00 PM
From: MileHigh	Respond to of 93625

OT 24/7/365 electronically connected world-wide market trading is coming IMHO... Wednesday July 28, 10:13 pm Eastern Time Japan's premier stock market looks for a future By Hiroko Nakata TOKYO, July 29 (Reuters) - Its annual trading volume barely half what it was a decade ago, analysts say the Tokyo Stock Exchange's troubles may have just begun. ''The emergence of online trading has raised questions over the role of the stock exchange itself,'' said Takao Saga, senior economist at Japan Securities Research Institute. Threatened by online brokering and new competitors, other exchanges in Japan have announced reforms and even planned closures. But analysts say Japan's top stock exchange, one of the world's biggest, has no quick solution to its problems. The TSE woes reflect those of Japan's economy, which has suffered for a decade as the booming 1980s slowed to a stop, then reversed into recession in the 1990s. Its annual trading volume fell to 123.20 billion shares in 1998, just 55 percent of its volume in 1989. The lack of trading interest has mirrored a tumble in the benchmark Nikkei index which is at less than half of its peak reached in early 1990. The number of foreign firms listed on the exchange has also fallen to just 48 in April from 127 in the early 1990s. The companies that have pulled out cite the costs of listing on the exchange and the paltry trading volumes in their shares here. The newest challenges include online brokering and new markets such as the Japanese version of New York's technology-laden Nasdaq market, which is set to debut next year. Several big Japanese firms and small specialised brokers have announced plans to offer online brokering, allowing investors to trade stocks through the Internet. Buying and selling orders are currently matched at the TSE, but if such brokers build a new network among themselves, they could go around the stock exchange in the future, analysts say. Internet-savvy Softbank Corp said last month it would set up Nasdaq Japan by the end of 2000 in tandem with the U.S. National Association of Securities Dealers. The electronic trading system will allow Japanese investors to trade Nasdaq's flagship high-technology stocks, as well as promising Japanese companies. TSE's response to these developments came earlier this month, when it said it was planning a new market to lure investors to Japanese start-up companies whose financial status falls short of the TSE's current listing standards. ''Establishing a new market for start-up companies is a national project. We're planning to open one as early as possible, hopefully by the end of the year,'' said Hiroyasu Shirahashi, head of planning at the TSE's listing policy group. But Japan Securities Research's Saga said it would be difficult for such new markets to induce big money as Japan lacks the risk-taking investors they require. ''It's impossible to think of any single cure-all right now,'' said Jun Yokoyama, analyst at Daiwa Institute of Research Ltd. ''The TSE is facing a difficult situation. Every possible step takes time, but there isn't much time left because the TSE is beleaguered by emerging markets,'' Yokoyama said. Some analysts also say one positive step the TSE could take would be to copy the joint stock corporation structure that the New York Stock Exchange (NYSE) is planning to adopt, as this might allow better management. Others suggest this may hampered by Japan's slow-moving, inflexible corporate culture. The TSE's current structure means its operations are strongly affected by the voices of its 124 member companies. The TSE and NYSE began meetings this month seeking to create new financial products to attract investors. A senior official in the TSE's working group with the NYSE said other ideas being considered by the TSE include extending trading hours and steps for smoother settlements of Japanese companies' American Depositary Receipts (ADR). Japan's other bourses are also making changes, as some adapt and others planning to fold. The Osaka Securities Exchange (OSE), Japan's second largest, next month plans to start trading on a new market for start-up companies that it set up late last year. Japan's over-the-counter (OTC) market has also loosened standards to attract more start-up companies. Exchanges in Niigata and Hiroshima prefectures in western Japan have announced they will close on March 1, 2000, victims of sharp declines in trading volumes and listed companies.