Aspiring Vietnamese corporations are increasing their exposure to a broader international investor community. Kazuhiko Yoshimatsu, general manager and chief representative of the Tokyo Stock Exchange in Singapore, discussed with VIR’s Luu Huong how businesses can tap into the largest stock exchange in Asia.
What distinguishes the Tokyo Stock Exchange (TSE) from other international bourses around the world?
|Kazuhiko Yoshimatsu, general manager and chief representative of the Tokyo Stock Exchange in Singapore |
The TSE is the most internationalised exchange representing Asia which has abundant liquidity, diversified investor base, and a wide range of more than 3,800 listed companies, spanning across various industries.
Not just Japanese businesses raising public fund here, but other world-renowned corporations also see the TSE as one of the most high-profile, prestigious bourses with stringent qualifications.
TSE is considered as the third-largest stock exchange on a global scale by aggregate market capitalisation of its listed entities, and the largest in Asia.
Following a restructure in April this year, TSE’s market divisions are now separated into three categories: prime, standard, and growth. These categories are distinguished from one another based on market liquidity, corporate governance, and other factors.
How do you assess the possibilities of Vietnamese businesses going public in international capital markets, and what are the advantages and challenges of overseas listing in the TSE?
The TSE assesses potential of newly listing companies based on their listing requirements with transparency, regardless of geographic location. As one of the largest stock exchanges in the world, we warmly welcome both of direct listing and dual listing from overseas countries. Companies can choose corporate inversion or Japan Depository Receipt for a listing scheme.
Foreign companies with growth potential, a solid foundation, and ample strategic plans are very much welcomed by Japanese institutional and individual investors as a good investment target. These companies could gain a positive branding in Japan’s extensive capital market.
One of the notable challenges for non-native investors is language, since almost all publicly-listed entities and relevant documents are in Japanese, which might be a hard nut to crack for foreigners. But given the professionalism and their vast international expertise, many Japanese underwriters and auditors can support foreign entities and can proceed smooth listing preparation.
One Vietnamese company, Hybrid Technologies, has been listed on the TSE growth market since December 2021. This successful case will lead to more business potential and initial public offering (IPO) opportunities among Vietnamese startups.
An rising number of Vietnamese firms are interested in special purpose acquisition companies (SPACs), particularly in other countries like the US. How does this apply on the TSE?
TSE has not introduced a SPAC listing scheme at the moment as there are numerous debates and concerns regarding the unfavourable, negative phase of its structure and conflict of interests in the global markets.
The US Federal Reserve has consecutively raised its interest rates in a bid to combat inflation, alongside other central banks. How does this affect IPO activities and valuations?
If the monetary policy of Japan would follow the Fed, the JPY rate would see a bit of a hike and it will lead to a more favourable environment for IPOs in Japan. Overall, it would create more impetus for international businesses planning to go public on the TSE.
| ||Liquidity remains under pressure despite stability |
Information risks and liquidity pressure in the capital market have had a negative impact on the stock market, and is expected to last at least in the short term.