ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Stocks

From veggies to weddings, Japan enjoyed diverse IPOs in 2016

After years of game and biomedical listings, locally focused companies venture in

A supermarket's Nousouken station, where shoppers can buy farm-fresh produce directly.

TOKYO -- Companies selling farm-fresh vegetables, performing wedding services and providing temporary staffing of middle-aged and elderly workers were among the smorgasbord of IPOs Japan saw in 2016, its most diverse year since 2007.

Of 33 business sectors, 18 were represented in listings last year. JMC, a manufacturer dealing in sand casting, made the first listing in the nonferrous metals category since 2008.

After the 2008 financial crisis, video game and biomedical companies led an increase in listing companies. Buoyed by the rise of smartphones, such game makers as COLOPL and gumi listed in the years 2012 to 2014. In 2013, biomedical companies including Peptidream and Medrx joined the market.

But the Tokyo Stock Exchange has made its screening process for IPOs stricter, and "listings have slowed down for these types of companies, as their earnings are difficult to forecast," said a Japanese public securities underwriter. Game companies' revenue depends largely on hits, and many biomedical companies are losing money.

Enterprises with relatively stable earnings have begun to list more, particularly local businesses, which have strong bases in their home areas, says a head of underwriting at Mizuho Securities. Businesses based outside Tokyo made up roughly 30% of all listing companies last year.

"Many business managers outside the major metropolitan areas decide to seek growth funding via listing, because regional financial institutions hesitate to lend to them without a good interest spread," says Yasuyuki Konuma, a senior executive officer at the TSE.

Such stocks have largely done well since listing. Agricultural firm Nousouken, which listed last year, now operates direct-sale stations for farm-fresh vegetables in partner supermarkets. "Their plan is unique, and earnings seem likely to increase," said one retail investor from Nagoya. Shares in the company have about quadrupled their opening price.

The widening range of sectors making IPOs means more choice for investors. "If listings spur new growth fields, it'll stimulate funding from individuals," says Hiroyuki Fukunaga of financial advisor Investrust.

So far in 2017, companies in 10 sectors have listed, and the scope is likely to grow throughout the year. Some 28 offerings were planned on the table for the January-March period, including ones still to come from musical instrument maker Zoom, logistics management Phyz and Hobonichi, an online newspaper company headed by acclaimed copywriter Shigesato Itoi.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media