tokyo stock exchange revamped in bid to woo foreign investors - Tokyo Stock Exchange revamped in bid to woo foreign investors

TOKYO – The Tokyo Stock Exchange (TSE) opened on Monday (April 4) to its first major revamp in six decades, with the bourse touting better clarity as it seeks to woo overseas investment and foreign company listings.

The three segments after the overhaul – Prime, Standard and Growth – replace the five sections originally on the bourse that had been criticised for their muddled listing criteria.

A total of 3,771 companies are listed on the TSE, with 1,839 blue chips on the Prime Market for large conglomerates that will be held to higher standards, including in corporate governance. They will be required to disclose business risks related to climate change.

Another 1,466 companies are on the Standard Market for mid-sized firms, while the remaining 466 firms on the Growth Market are start-ups or small-cap businesses.

While the TSE touted the reforms as a means of consolidating companies into distinct categories, some investors have criticised the changes as merely cosmetic since more than 80 per cent of the companies in the original First Section were transferred over to Prime.

Still, the makeover comes as Tokyo seeks to market itself as a global financial hub and as the TSE aims to recover from reputation damage after a trading system failure in 2020 led to an unprecedented full-day trading halt.

The TSE is also seen as lacking in vitality – the Nikkei 225 Index of 225 large conglomerates is down by about 30 per cent from its 1989 peak – as compared with other regional stock markets in Shanghai and Singapore.

Mr Akira Kiyota, chief executive of TSE parent Japan Exchange Group, said at a ribbon-cutting ceremony that he expects the reforms to “support sustainable growth and medium- to long-term enhancement of corporate value of listed companies”.

The rebranding failed to excite investors on Monday, with the Nikkei 225 Index remaining little changed for most of the day, before ending up 70.49, or 0.25 per cent, to close at 27,736.47.

Still, in a statement of its intent to woo foreign companies, the TSE took out a full-page Phuket, Thailand and Asia News: in The Straits Times on Monday.

Mr Marcus Neo, chief executive of Singapore plastics manufacturer Omni-Plus System (OPS), which counts Braun and Dyson among its clients and made its initial public offering in June last year on the Mothers Index for start-ups, is also featured in a TSE television commercial on the rebranding.

OPS is just one of five foreign companies to be listed on the TSE.