Mr. Nishimuro TSE


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Mr. Nishimuro TSE

  1. 1. July 2007 Tokyo Stock Exchange, Inc. Tokyo Stock Exchange - Your Gateway to the Japanese Capital Market - Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved.
  2. 2. TSE at a Glance <ul><li>Chairman of the Board: Taizo NISHIMURO </li></ul><ul><li>President & CEO : Atsushi SAITO </li></ul><ul><li>Foundation: 15 May, 1878 </li></ul><ul><li>Demutualisation: 1 November, 2001 </li></ul><ul><li>Number of Listed Companies: 2,422 (Domestic: 2,396, Foreign: 26) </li></ul><ul><li>Market Capitalization: JPY 571 trillion (as of May 30, 2007) </li></ul><ul><li>Daily Average Trading Value: JPY 3,155 billion (May, 2007) </li></ul><ul><li>Securities Traded at TSE: Equities, ETFs, REITs, Bonds, </li></ul><ul><li>Derivatives </li></ul><ul><li>Structure of Equity Market: Main Board (First & Second Sections) </li></ul><ul><li>Venture Board (Mothers) </li></ul>
  3. 3. Source: World Federation of Exchanges (Dec.2006) * Market Capitalization as of Dec. 2006 for Domestic Companies only . KRX includes Kosdaq market. Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. World’s Top 5 Stock Markets by Market Capitalization * Asian Top 5 Stock Markets by Market Capitalization * Tokyo Stock Exchange in the World
  4. 4. ( Source ) The Bank of Japan Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. Target for Japanese government’s policy “From Savings To Investment” Highest level in the world ! ( Unit : JPY100 billion ) Huge Financial Assets Held by Japanese Individuals 15,205 6,242 80 1,180 7,703 FY2005 5,628 5,420 5,341 5,590 5,581 5,553 4,446 2,471 1,115 Others 14,295 69 843 7,755 FY2004 14,093 65 812 7,796 FY2003 13,560 71 517 7,755 FY2002 13,736 87 654 7,654 FY2001 13,890 60 735 7,514 FY2000 12,689 21 819 6,296 FY1995 10,262 37 961 4,818 FY1990 6,312 14 532 3,294 FY1985 3,283 7 212 1,948 FY1979 Total Foreign Securities Domestic Stock Cash/ Deposit  
  5. 5. (%) Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. Japanese Individuals’ Financial Assets (1979=100) Sharp increase in investment in overseas securities by Japanese investors ! Active Investment in Overseas Securities by Japanese Individuals
  6. 6. [Trading in Indian Stock by Japanese Investors ] [Balance of Japanese Investment Trusts Investing in Indian Stock ] [JPY bils.] [JPY bils.] (Source) JSDA (2000-2004), BOJ (2005-2006) (Source) Toshi-Shintaku Jijo Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. Boom of Investment in Indian Stock Market
  7. 7. 【 Basic View 】 Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. ※ :” Relationship with Japan” is not a listing requirement but just a part of promotion policy of TSE. Long-term listing on TSE More Asian companies with high growth potential are expected to strengthen ties with the Japanese market and Japanese enterprises. Marketing Policy for Listings of Non-Japanese Companies To solidify TSE’s position as the core market for efficient flow of funds in Asia, “originality” and “uniqueness” of TSE market should be greatly improved. Relationship with Japan ※ Asian Companies with High Growth Potential Retail Investors + Institutional Investors Change Current Basic Concept Blue-chips in US and Europe Secondary Listing Basic Concept in the Past Retail Investors Secondary Listing + Single Listing
  8. 8. A foreign company can merge or acquire a Japanese company through its subsidiary in Japan in an effective “stock swap”. ( implemented in May 2007. ) a. What Is a Triangular Merger? Japanese Company to be merged ( J Corp. ) Japanese Corp.’s Shareholders Overseas Japan FS Corp. ( Subsidiary of F Corp. ) J Corp. Stock F Corp. Stock Succeeding Company Merged Company Merger of J Corp. by “stock swap” F Corp. ( Parent of FS Corp ) Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. New Framework for Alliance with Japanese Companies ~ Triangular Merger ~
  9. 9. Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. b. Conditions for Successfully Conducting a Forward Triangular Merger (※) It is also necessary for an acquiring company (F Corp.) to meet home country’s legal requirements. The following points should be ensured for shareholders of the merged Japanese company. ◎ Secondary market in Japan ◎ Sufficient disclosure of corporate information ◎ Smooth exercise of shareholders’ rights including voting rights Under Japanese laws and regulations, a foreign company is required to obtain approval from the merged Japanese company’s shareholders if it conducts a triangular merger. (※) If the foreign company is listed on TSE, it can satisfy the above points. Easy to obtain approval at General Shareholders Meeting for a triangular merger New Framework for Alliance with Japanese Companies ~ Forward Triangular Merger ~
  10. 10. Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. * Currently, original shares and DRs issued outside Japan (e.g. ADRs, GDRs) can be listed on TSE through depository linkage. Introduction of JDR* ( Japanese Depositary Receipt ) Listing System (to take effect in Autumn 2007) Giving consideration to corporate governance practices in the home country Support from Japanese Government ( FSA & METI )   JDRs ( DRs issued in Japan ) will be added to TSE’s product line-up as a new vehicle for capital raising in Tokyo Market. Efforts by TSE for Revitalising its Foreign Stock Market <ul><li>Even the following foreign companies can be listed on TSE: </li></ul><ul><li>A company which is prohibited from overseas listing by way of original shares under the legal framework of the company's home country, </li></ul><ul><li>A company for which restrictions are imposed of shareholding by foreigners, or </li></ul><ul><li>A company issuing classified stock which may not be unconventional in Japanese market. </li></ul>
  11. 11. Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. <ul><li>Large number of manufactures with competitive edges </li></ul><ul><li>Close economic ties with Asian countries </li></ul><ul><li>High attractiveness of Tokyo as metropolis </li></ul><ul><li>To enhance status of Tokyo market as an international financial centre </li></ul><ul><li>To improve management returns of financial assets held by Japanese individuals </li></ul>+ Vigorous Discussion inside Japanese Government ( Cabinet Office, Financial Services Agency, etc have set up one advisory body after another since the 2 nd half of 2006.) Superiority of Japan Policy of Japanese Government High possibility that measures will be taken to contribute to revitalisation of TSE’s Foreign Stock Market Efforts by Japanese Government’s Response
  12. 12. Roles Expected of TSE for DMIC Tokyo Stock Exchange (TSE) Japan’s Huge Financial Assets Indian Companies DMIC Project Further Development of Indian Economy Investment Fund Raising by Listing Investment Through listing of Indian companies TSE will play a role of a bridge between Indian companies having vigorous fund raising needs and Japanese investors having abundant financial assets.
  13. 13. Thank you Ⓒ 2007   Tokyo Stock Exchange, Inc. All Rights Reserved. While every effort has been taken to ensure that the information contained on this material is correct, TSE is not responsible for any damages or losses suffered as a result of the use of this information. For further information, please contact TSE personnel.  None of the information contained in this material constitutes a recommendation, solicitation or offer by TSE or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.