Japan's securities industry group to review IPO price-setting process
Reuters
Published Sep 15, 2021 04:16AM ET
TOKYO (Reuters) - A Japanese brokerage industry group said on Wednesday it would review the process for setting the price of initial public offerings (IPO), responding to criticism from startups that IPO prices have often been too low and surged on market debuts.
The Japan Securities Dealers Association said it would set up a panel consisting of scholars, investors and executives from major brokerage houses and startups this month to review the process.
On the Tokyo bourse's Mothers market for start-ups, it is common to see wide gaps between IPO prices and prices fetched on debut, which some startups blame on brokerage houses setting IPO prices excessively low.
Brokerage houses say the wide gaps as a result of high volatility in the Mothers market, where share prices of firms with very small market capitalisations tend to swing wildly.
"We hope to examine the process from various perspectives," Toshio Morita, chief executive of the industry group and the former head of Nomura Holdings (NYSE:NMR)' main securities arm, told a news conference.
He said prices on a firm's market debut were bound to surge due to tight supply, although he said the process had not been reviewed extensively and more flexibility could be introduced.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.