More than 80% of companies listed on the First Section of the Tokyo Stock Exchange are the highest prime

The Tokyo Stock Exchange will reorganize the current First Section of the Tokyo Stock Exchange in April to create a new market.

As a result, more than 80% of the companies listed on the first section, 1841, will continue to be listed on the top prime.

Currently, 2185 companies are listed on the first section of the Tokyo Stock Exchange, 474 companies are listed on the second section, 424 companies are listed on Mothers, and 694 companies are listed on JASDAQ.

This will be reorganized into three in April, but with the announcement on the 11th, 1841 companies will move from the first division to the top prime.

Next to Standard, 1477 companies will be transferred from the first and second parts, and JASDAQ, and 459 companies will be transferred from Mothers and JASDAQ to the third growth.

Most of the companies listed on the first section are primed

Of these, Prime has stricter listing standards than the current first section in order to attract more investment funds from overseas.

As of the end of June last year, more than 660 companies, which is about 30% of the listings on the first section, did not meet the prime criteria, and the response of each company was drawing attention.

For companies that do not meet the criteria, there is a transitional measure that can be transferred to prime by submitting a plan for improvement, so 296 companies chose to utilize this transitional measure, and the companies listed on the first section Most of them were listed on Prime.

On the other hand, some companies have dared to choose to be listed on the next standard, not prime, even if they meet the criteria, and 344 of the first-part listings will move to standard.

Hiromi Yamamichi, President of the Tokyo Stock Exchange, said, "The goal of the classification review is to create a virtuous cycle of companies that challenge growth in an era of change and investors who support companies through investment. We believe that it will lead to the realization of a prosperous society through the proper distribution of growth and the fruits of growth. "

Companies that have decided to go public even if they do not meet the prime standards

Needs Well, a first-part listed system development company, does not meet the Prime listing criteria, but has decided to take advantage of transitional measures to list on Prime.

As of the end of June last year, the market capitalization of the stocks on the market was only 2.7 billion yen, which does not meet the prime listing standard of 10 billion yen or more.

After listing on JASDAQ in 2017, it was promoted to the first division in 2019, and by moving to a higher market segment, there were various merits such as increasing applications for new graduate recruitment and cultivating new customers. It is said that.

For this reason, we thought that it was essential to continue listing on the top category, so we decided to take advantage of transitional measures and move to prime.

In addition to compiling a plan with the aim of achieving the standard by the end of September next year, developing a warehouse management system that utilizes robots, etc., and entering the logistics business, we will work with companies that have AI = artificial intelligence technology. Our policy is to proceed with alliances and acquisitions.

Kozo Funatsu, President of Needs Well, said, "The listing standards for the prime market are difficult for us to achieve with the conventional business methods. The reorganization of the TSE is a business that we have not considered before, such as deepening relationships with other companies. It created an opportunity to implement expansion efforts. "

Some companies dare to choose the standard

On the other hand, there are companies that are listed on the first section and dare to choose the standard even if they meet the prime criteria.

Ebara Foods Industry Co., Ltd., a seasoning maker, mainly sells household seasonings used for grilled meat and hot pot dishes, and has focused on sales promotion and new product development to improve its business performance.

As of the end of June last year, we met the prime listing criteria, but we found that choosing prime would require us to disclose information about the risks of climate change, and that new work would be costly.

For this reason, the company dared to choose to be listed on the Standard because it wanted to concentrate its limited management resources on product development and human resource development.

Takeshi Morimura, President of Ebara Foods Industry, said, "What we ask the world is not only stock prices, but also products and services, name recognition and trust. I chose the standard market to do so. "

In addition, the current Shinsei Bank, Taisho Pharmaceutical Holdings, and Jasdaq's Japan McDonald Holdings will be listed on the standard.

The market capitalization of the world's major markets

TSE aims to attract overseas investment funds and revitalize transactions by tightening the listing standards of the highest prime market and narrowing down to companies with international competitiveness.

Competition with major exchanges in the world is fierce, and according to the World Federation of Exchanges, the market capitalization of the entire exchange, which is the product of the number of shares issued by listed companies and the stock price, is as of the end of November last year. It's over $ 6.4 trillion.

In contrast, the world's top New York Stock Exchange has a huge gap of over $ 28.4 trillion.

The Shanghai exchange is over $ 7.9 trillion, surpassing Tokyo, and the Hong Kong exchange is over $ 5.4 trillion, catching up with the Asian market.

Expert "Needs further market reform"

Mizuho Securities' chief equity strategist, Masatoshi Kikuchi, said about the market restructuring, "Some companies have started to respond positively to investors by facing the stock market sincerely, and there was a certain effect. I'm talking.

On the other hand, most of the companies listed on the first section said that they chose Prime, saying, "It is a gradual Japanese reform, and the change is too slow and too small. This will trigger foreign investors to actively buy Japanese stocks. I can't expect much. "

On top of that, "The market capitalization of Japanese companies has become too small even in international comparisons, and it has not received much attention from overseas investors. It is necessary to promote selective and concentrated management such as industry restructuring and corporate acquisitions and narrow down the number of companies. There is, "he said, recognizing that it is necessary to improve the attractiveness of listed companies and further reform the market.

For companies that did not meet the criteria and chose prime by utilizing transitional measures, "Institutional investors should invest if the business plan is really feasible. Is it possible to achieve the business plan in the future?" It will be done. "