According to a Bloomberg report, the biggest rally in equity on the Tokyo Stock Exchange last seen four decades ago drove up the number of initial public offerings. The report also said every new listing on the Japan bourse were set to clock in record highs since 2007 and guaranteed that companies' shares of stock on its first day of trading will experience a price pop.
Nomura Holdings Inc projected that around 60 companies had planned or had already been listed this year. This was a significant number seen since 2007, wherein the stock exchange of Japan saw 121 offerings in total in one year. 37 of the IPOs since December have reached record highs and share prices continued to surge on the first trading day. Based on data compiled by Bloomberg, this was the longest streak of gains since 2006, wherein 39 listings also saw shares advanced further. Data also indicated that the average percent of advance seen in shares in IPOs on their first day was 140%. Stem-cell medical research company Reprocell Inc climbed and increased its share price to more than five times in June, which was considered the largest advance for 2013.
Mitsubishi UFJ Asset Management Co co-manager and analyst Koji Uchida said, "The IPO boom will maintain its momentum for some time to come given the current market environment. Many companies listing this year have interesting business ideas and good growth potential."
Bloomberg deduced that the IPO revival seen on the Japan bourse was a clear sign that the confidence of Japanese companies on accessing capital from the best-performing developed stock market in the world is increasing. Moreover, the news agency also concluded that the winning streak of IPOs in Japan had helped retaining a favorable level of demand from investors.
Nomura's IPO department executive director Keiji Kuramoto said around 80 companies had plans to get listed on the Japan bourse next year, and more in 2015.
"We continue to hold IPO seminars in Tokyo, Osaka and Nagoya. The reaction to the seminars is good," Kuramoto said.
Join the Conversation