Nasdaq Japan Stock Market to Open in June, Six Months Earlier Than Planned
By Neil Roland
Nasdaq Japan to Start From June 2000, Part of OSE (Update1)
Tokyo, Dec. 24 (Bloomberg) -- Nasdaq Japan, the Japanese
version of the dealer-run Nasdaq stock market in the U.S., will
begin trading by mid-2000, six months earlier than planned. It
will be part of the Osaka Securities Exchange.
Earlier this year the U.S. National Association of
Securities Dealers (NASD), which owns Nasdaq, and Softbank Corp.,
Japan's largest investor in Internet-related ventures, agreed to
bring Nasdaq to Japan.
The NASD-Softbank alliance and the Osaka exchange signed an
agreement today under which Japan's second largest stock exchange
will provide surveillance, trade settlement, and company-listing
services for Nasdaq Japan. Osaka's backing will allow trading of
newly public Japanese companies and Nasdaq-listed U.S. companies
with Japanese units to start next June or July, said NASD
chairman Frank Zarb.
``This moves to a much earlier date the interlinking of
pools of liquidity so U.S. companies can be exposed to investors
outside the country, and non-U.S. companies can be exposed to
investors in the U.S.,' he said Thursday.
Without the involvement of Osaka, or any other established
Japanese exchange, NASD-Softbank would have had to set up its own
dealers association. That would have taken more time.
Establishment of the exchange will trigger an
``unprecedented rush in public stock offerings,' Masayoshi Son,
Softbank's president, told reporters Friday in Tokyo.
Softbank is Japan's largest distributor of software and
computer technology publications. The company controls the
Japanese operations of E*Trade Group inc., the No. 2 U.S. online
brokerage, and Yahoo Inc., a global Internet media company.
Growing Competition
Nasdaq, the second largest U.S. stock market, would be the
first American market to open in Japan. The venture is also
another step in Nasdaq's efforts to compete with the New York
Stock Exchange and electronic trading networks such as Datek
Online Holdings Corp.'s Island by moving toward round-the-clock
trading in international stocks.
Unveiled last June, Nasdaq Japan was to have started trading
at the end of next year. Its introduction was moved up, in part,
in response to the Tokyo Stock Exchange's opening of a new market
for Internet start-up companies on Wednesday, Zarb said.
``Competition's a pretty good motivator,' he said.
The Tokyo `Mothers' market, which stands for the Market of
High-growth and Emerging Stocks, has the most lenient listing
requirements of all Japanese markets, making it a haven for young
companies in need of capital.
Two Internet-related startups - Liquid Audio Japan and
Internet Research Institute -- listed their shares on the Mothers
this week. Today, Liquid Audio traded for the first time, rising
to 6.12 million ($59,000) yen, more than double its offer price
of 3 million yen. Internet Research didn't trade, though it was
bid to 29.5 million yen, more than double its IPO price of 11.7
million yen.
Liquid Audio Japan is a maker of software to download music
from the Internet. Internet Research provides technical support
for Internet systems.
Mutual Access
While buying and selling on Nasdaq Japan initially will take
place during regular Japanese trading hours, the market
eventually plans to offer extended-hours trading.
Nasdaq Japan's promoters envision mutual access to each
others' markets among participants in Nasdaq markets in Japan,
Europe and the U.S., while Nasdaq Japan is also expected to
become a central market for trading Southeast Asian stocks, Son
said in Tokyo.
The memorandum of understanding between the Osaka market and
the Nasdaq Japan Planning Co., a company formed by Nasdaq and
Softbank to plan the new market, followed six months of talks,
Zarb said.
Osaka's computerized trading systems will be used in part by
the new market starting in the middle of next year, though a new
trading system is to be phased in by early 2001.
Prospective Listings
About a dozen U.S. companies with Japanese units have
expressed interest in being listed on Nasdaq Japan, though Nasdaq
plans to approach many more, Zarb said. By the end of September,
Nasdaq also expects to have the Japanese IPOs that have been
trading in Japan offered for trading in the U.S., he said.
Softbank plans to take many of its group companies public on
Nasdaq Japan, including the joint venture with NASD that will
operate the market. Some Softbank companies may de-list from
other exchanges, Son said.
The remainder of the original Nasdaq-Softbank plan that was
announced earlier this year remains intact. Between 50 and 100 of
the largest Nasdaq stocks will be offered for trading on Nasdaq
Japan by the end of next year. Trading on Nasdaq Japan would be
handled by U.S. and Japanese dealers for possibly 20 hours a day
-- closing only between 4 p.m. and 8 p.m. New York time (6 a.m.
to 10 a.m. Tokyo time).
Eventually, all 5,000 Nasdaq stocks -- including technology
giants such as Microsoft Corp., Intel Corp. and Cisco Systems
Inc. -- could be traded 24 hours a day.
Nasdaq and Softbank, each of which owns half of Nasdaq
Japan, will offer equity in the new market to broker-dealers in
the U.S. and Japan next year. |
