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Technology Stocks : Softbank Group Corp -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (3102)	1/6/2000 12:33:00 PM
From: manohar kanuri	Respond to of 6018

ft.com EQUITIES: Japanese markets Japan's stock exchange infrastructure is heading for a shake-up - and not before time. New entrants to the business of equity sales will make equities cheaper and more accessible than ever before. This is particularly important at a time when new businesses are crucial to Japan's economic recovery. The monolithic Tokyo Stock Exchange served Japan's large, traditional companies well, but failed to make the equity market attractive to individual investors, or even a viable option for many companies. The TSE's stringent listing requirements, including the need for a three-year history of operation and a record of profitability, made the exchange inaccessible to most smaller firms, particularly internet businesses. It took the private company Softbank, working with the founders of the US Nasdaq, to notice the yawning gap in the market and propose the establishment of an exchange aimed at small companies, Nasdaq-Japan. Only then did the TSE respond by setting up its own market for emerging stocks, called Mothers. Both exchanges are expected to attract business quickly from Japanese internet entrepreneurs. Nasdaq-Japan should also make it easier for US investors to buy smaller Japanese stocks, and vice-versa. Yesterday brought the news that two internet brokers intend to set up a stock matching service or electronic communications network (ECN). These are already revolutionising equity dealing in the US, where they handle about 30 per cent of all Nasdaq-traded stocks. ECNs are mini-exchanges, operated by brokers, which match buy and sell orders for a fee. They make trading cheaper, more easily accessible (via online brokers), and open up the possibility of out-of-hours trading. The development of ECNs could tempt more Japanese individuals to take their money out of low-yielding safe assets and place it in the equity market. Holdings of equities by individuals in Japan are relatively small - equities and bonds comprise just 7.3 per cent of Japanese individuals' financial assets, compared with 48 per cent in the US. Rather than sitting in banks, part of the huge pool of Japanese savings could be used productively to fund new businesses. Some of the equity market ventures may yet fail to get off the ground. But the challenges to the Tokyo Stock Exchange's dominance have started an unstoppable process. Modernised markets will do much to transform Japan's equity culture, and should ensure that the markets are easily accessible for all types of business and investor.