Tokyo exchange courts Asian startups for IPOs
The Tokyo Stock Exchange aims to attract listings from Asian startups, leveraging the market’s recent ascent to record highs and positioning itself as a preferred fundraising destination for companies outside Japan. Under a new initiative, the exchange is working with banks and other partners to select a few startups from other parts of Asia this summer to help them grow their business for potential initial public offerings down the road, said Hiromi Yamaji, group chief executive of Japan Exchange Group, the parent company of the Tokyo exchange. “We want them to use the Japanese market as a springboard to become a global company," Yamaji said in a recent interview.
The country’s stock market is one of the world’s best performers so far this year, driven by the return of modest inflation and a weaker yen, which boosts the value of corporate profits earned overseas in yen terms. The benchmark Nikkei Stock Average hit a record for the first time in 34 years in February and renewed record highs in the subsequent weeks. Some investors attribute the ascent to the Tokyo Stock Exchange’s initiative from last year, which called on listed companies to improve returns on shareholders’ capital and correct discounts reflected in their share prices.
As a result, many companies have increased their dividends and share buybacks. The exchange’s renewed push also comes at an opportune time. Its peer in Hong Kong is facing a slowdown in IPOs, partly due to signs of weakness in the Chinese economy.
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