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🇰🇷 South Korea /Economy & Trade

Japan’s stock exchange delistings have already surpassed last year’s total

From Hankyoreh · () Korean

Translated from Korean and summarized by DistantNews. Read the original for the full story.

At a glance

Analysis Named sources Ongoing story
  • Tokyo Stock Exchange delistings scheduled for this year reached 128 companies by Sept. 4, exceeding the 125 recorded for all of last year.
  • Another 29 companies are under supervision and could be delisted, as the exchange enforces stricter listing requirements on market capitalization and other measures.
  • Some companies are voluntarily leaving the exchange, including firms backed by investment funds seeking more freedom from short-term market and shareholder pressure.

Japan is on track for a record number of corporate delistings, with 128 companies already confirmed for removal from the Tokyo Stock Exchange by Sept. 4. The figure has surpassed last year’s full-year total of 125, according to the Nikkei.

Another 29 companies have been placed under supervision and could also be delisted. The number of companies listed on the exchange has fallen 4% from the record reached at the end of 2023, leaving it at its lowest level in about seven years.

The main driver is the exchange’s tougher approach to keeping companies listed. Four years ago, the Tokyo Stock Exchange raised the free-float market-capitalization requirement on its Prime market from 1 billion yen to 10 billion yen. The threshold for the smaller Standard market rose from 250 million yen to 1 billion yen, while the Growth market requirement increased from 250 million yen to 500 million yen.

We will not be preoccupied with the number of listed companies itself.

· Hiromi YamajiThe Japan Exchange Group chief executive described the exchange’s emphasis on company quality rather than listing volume.

The exchange introduced a three-year transition period, and companies began leaving under the new rules last year. Shareholder numbers, the amount of publicly traded stock and net assets also count among the evaluation criteria. The stated aim is to prevent distorted share prices, improve liquidity and maintain the quality of listed companies.

Voluntary delistings are also significant. Of the companies scheduled for delisting this year, 28 plan to go private with investment-fund support. The article points to EQT Partners’ acquisition of Japanese elevator maker Fujitec and an ongoing management buyout of online printing company Raksul backed by Goldman Sachs. Some artificial-intelligence startups are also choosing private ownership to pursue investment without being tied to short-term results. Hiromi Yamaji, chief executive of Japan Exchange Group, has said the exchange will not focus simply on the number of listed companies.

Among startups, there are many cases in which growth stops when investors withdraw their funds after earning profits through an IPO.

· NikkeiThe report cited this trend in explaining why some companies are choosing to go private.
About this summary

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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