Tokyo Stock Exchange and London Stock Exchange to establish a new growth market
London Stock Exchange Group plc and Tokyo Stock Exchange Group, Inc. today announced their intention to establish a new market for emerging companies. The market will be operated as a joint venture on an equal basis, and will build on the London Stock Exchange’s success in creating and developing a market structure designed for smaller companies through AIM, and the Tokyo Stock Exchange’s local expertise and infrastructure.
The market will be a new risk capital market for companies and investors from Japan and elsewhere in Asia. It will create new investment opportunities for sophisticated investors, and provide a new funding option for smaller companies which are not yet sufficiently developed for existing public markets. Historically, these companies have faced a funding gap, with limited access to risk capital resulting in a reliance on personal capital or bank loans.
Atsushi Saito, CEO of Tokyo Stock Exchange Group, Inc., said:
“The new market will contribute to Japanese economic growth by providing a vibrant risk capital environment for issuers. This will make Tokyo the centre of a new community of Japanese and international investors and intermediaries. We are very pleased to work closely with our partner the LSE, and to benefit from their success in the AIM market. We look forward to working with them to help young, innovative companies access the long-term funding that they need to support future growth.”
Clara Furse, Chief Executive of the London Stock Exchange, said:
“We are very happy to have this important opportunity to work with the Japanese financial community to introduce a market model based on AIM. AIM is already established as the world’s leading growth market, providing smaller companies with long-term institutional investment capital to grow their businesses within an appropriate regulatory framework.
“Bringing together the Tokyo Stock Exchange’s knowledge of the region and our expertise in the development of growth markets creates a powerful partnership to deliver this exciting new venture.”
It is anticipated that the market will be established by the end of 2008, and will be operated by a joint venture company based in Tokyo. The market’s structure will reflect AIM’s principles-based regulatory model and will be designed to meet the needs of international investors, balancing appropriate safeguards with the flexibility required by growth companies, and supporting companies in raising capital throughout their lifecycle.
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For further information, please contact:
Tokyo Stock Exchange Group, Inc.
Mitsuo MIWA, Media Relations
London Stock Exchange plc
John Wallace / Catherine Mattison
+ 44 (0)20 7797 1222
Notes to Editors
In February 2007 the London Stock Exchange and Tokyo Stock Exchange agreed to consider the opportunities for joint work in; the creation and promotion of new jointly traded products; cross-access arrangements and the operation and regulation of markets for growth companies.
About Tokyo Stock Exchange Group, Inc.:
Tokyo Stock Exchange Group, Inc. is a wholly owning parent company of Tokyo Stock Exchange, Inc. Tokyo Stock Exchange, Inc. is the premier exchange for Japanese cash equities and derivative products from the perspective of investors both in Japan and abroad. In 2006, stock trading volume on TSE reached 502 billion shares. This has positioned TSE as the central market of Japan. Also in 2006, TSE recorded an average daily trading volume of 2,026.0 million shares, and daily average trading value of JPY 2,716.7 billion. At the end of December 2006, the number of listed companies was 2,416, with a market capitalization reaching JPY 549.7 trillion. In addition to its core Japanese equity market, TSE provides markets for derivatives products such as long-term Japanese government bond futures and TOPIX index futures. Japanese Government Bond (JGB) futures trading, the cornerstone of TSE’s fixed income derivatives market and the benchmark of the Japanese bond market, continues to thrive on investor demand from across the globe. The JGB futures contract is one of the most active long-term interest rate futures contracts in the world, with its annual trading volume in 2006 reaching 12,049 thousand contracts. The TOPIX futures contract, which is
actively traded by institutional investors, is the leading stock index futures product in Japan, with the largest open interest among Japanese stock index futures products. The trading volume in 2006 rose to 14,907 thousand contracts in 2006, an increase of about 16.5% over 2005. With respect to these cash and derivative products, the TSE, as a self regulatory organization, continuously makes every effort to provide a fair, transparent, and efficient market.
For more information on Tokyo Stock Exchange, go to: www.tse.or.jp/english/index.shtml
About the London Stock Exchange:
The London Stock Exchange is the world’s premier international equity exchange and a leading provider of services that facilitate the raising of capital and the trading of shares.
The London Stock Exchange is the most international equities exchange in the world and Europe's largest pool of liquidity. By the end of 2006, the market capitalisation of UK and international companies on the London Stock Exchange’s markets amounted to £4.4 trillion, with £6.7 trillion of equity business transacted over the year.
The London Stock Exchange is a Recognised Investment Exchange (RIE) under the Financial Services and Markets Act 2000 and is supervised by the Financial Services Authority.
Established in 1995, AIM is the London Stock Exchange’s international market specifically designed for smaller, growing companies. The market combines the benefits of a public flotation with appropriate levels of regulation – a principles-based regulatory approach together with high standards of disclosure – meeting the needs of international investors. There are currently over 1,600 companies on AIM with a combined market capitalisation of over £100 billion, of which £55 billion is held by institutional investors. AIM’s regulatory model has enabled its companies to achieve long-term investment; of the £52.7 billion raised by AIM companies in the 12 years since launch, £22.9 billion was raised by companies subsequent to joining the market.