TWO jumbo initial public offerings may roughly triple the amount of money raised in Japan’s stock market this year as sentiment bounces back from this month’s sell-off.
Subway operator Tokyo Metro may raise as much as 350 billion yen (S$3.2 billion) as early as October, according to people familiar with the matter. Chipmaker Kioxia Holdings is looking to raise about US$500 million in coming weeks, Bloomberg reported on Friday (Aug 26).
New share sales in Japan have only raised about US$1.45 billion this year, down more than 40 per cent from the same period in 2023, according to data compiled by Bloomberg.
New listings look to be gaining momentum again as the Nikkei 225 Stock Average has rebounded more than 20 per cent from this year’s intraday low set on Aug 5. The gauge is now 14 per cent up for the year with confidence boosted by the authorities’ aims to bolster corporate governance.
“It’s not a bad time to hit the market,” said Alexis Adamczyk, the pan-Asia head of equity capital markets at Mizuho Securities Asia. Improving sentiment in Japan, including the recent adjustment in the Bank of Japan’s policy, has supported the environment for IPOs, he said.
Tokyo Metro’s IPO is set to raise somewhere around 300 billion to 350 billion yen, the people familiar with the matter said. The listing is taking place against a backdrop of legislation that requires the government to sell shares in the mass-transit operator by March 2028 to repay debt sold following the 2011 earthquake and tsunami.
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Tokyo Metro declined to comment.
Bain Capital is pressing ahead with its revived plans for an IPO of Kioxia, people familiar with the matter told Bloomberg last week. Bain, which led a group investors in acquiring Kioxia from Toshiba for US$18 billion in 2018, has considered listing Kioxia in the past but was held back by turbulent equity markets and volatile memory-chip pricing.
Challenges in markets like Hong Kong, where IPO volumes have plummeted, have prompted investors to look into other countries for listings, Mizuho’s Adamczyk said.
“A lot of investors in Asia have become Japanese equities specialists,” he said. “They have focused on Japan, as it offers value and growth.” BLOOMBERG
