In the face of global economic uncertainty, the Japanese market has come into focus for investors and businesses. A recent seminar titled “The Ultimate Guide to IPO in Japan” held in Singapore on October 16, 2023, organized by Mitsubishi UFJ Trust and Banking Corporation, Anderson Mori & Tomotsune, and the Japan Exchange Group (JPX), provided insights into this emerging opportunity and how to navigate the intricacies of listing on the TSE.
Kazuhiko Yoshimatsu, general manager and chief representative of the TSE, shed light on the stock exchange’s interest in the Southeast Asia region. “Southeast Asian startups with growth potential are attractive investment targets for Japanese investors. For Japanese listed companies eyeing overseas business opportunities, the technological capabilities and customer bases of these startups present significant allure due to potential business collaboration. TSE aims to contribute to Asia’s growth by offering growth capital to Southeast Asian startups and simultaneously fostering business collaboration among Japanese companies to bolster their international presence,” Yoshimatsu said.
The seminar’s objective was to provide a comprehensive overview of TSE listing requirements and practical considerations, presenting Japan as an alternative fundraising option amidst the prolonged recovery of the US market.
By bringing together industry experts, representatives of financial institutions, and legal professionals, the event fostered a deeper understanding of the IPO landscape in Japan, highlighting its viability and potential challenges for Southeast Asian businesses.
Hiroshi Iwase, general manager and head of global listing (new listings) at the TSE, described the Japanese market’s stability and adaptability to global trends. Despite global economic fluctuations, the market has amassed 3,910 listings with a daily trade volume of USD 27 billion. The TSE Growth Market, which is tailored for high-potential companies, is starting to gain traction, attracting foreign interest.
Yoichiro Hama, deputy general of the IPO department at Mizuho Securities, delved into the aspects startups should consider when contemplating an IPO in Japan. He underscored the importance of understanding regulatory requirements, the intricacies of the IPO process, and potential challenges that might arise during the process.
Kazuhiro Matsuo, an ASEAN and Japan business services leader and assurance partner at Ernst & Young, and Wataru Higuchi, a partner at Anderson Mori & Tomotsune, jointly covered the financial and legal aspects of listing on the TSE. Matsuo discussed the financial evaluations and audits that businesses would need to undergo, emphasizing the rigorous standards upheld by the TSE, while Higuchi elaborated on the legal documentation and compliance required. Their presentation offered a holistic view of the financial and legal journey of an IPO in Japan.
Atsushi Takahashi, manager at the global corporate agency planning office of Mitsubishi UFJ Trust and Banking Corporation’s corporate business planning division, discussed the role of banking institutions in the IPO process, highlighting the support mechanisms in place for startups, including financial advisories and potential funding initiatives. Takahashi underscored the collaborative nature of the IPO process, where banking institutions play a pivotal role in ensuring a smooth transition for businesses seeking listing on the TSE.
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A panel discussion, featuring Marcus Neo, CEO of Omni-Plus System, Yuki Ishida, CEO of YCP Holdings, and Kosuke Sogo, CEO of AnyMind Group, offered practical perspectives on the IPO journey in Japan. The panelists shared their personal experiences, challenges faced, and lessons learned during their respective IPO processes. Higuchi moderated the discussion.
After successfully listing on the TSE this year, Sogo hopes to see more startups consider Japan as an IPO destination. “We’re seeing the JPX become more open toward startups from abroad looking to go public, and I believe that there will be greater opportunities for startups in Singapore and across the region to seek an IPO in this venue,” Sogo said.
Sogo added that one key step for aspiring startups considering a listing in Japan would be to build a story in Japan. That means having Japanese investors, customers, or a local presence contribute to the company’s narrative in Japan. In addition, areas around corporate governance and compliance should be developed as soon as a company has confirmed its plans for an IPO, or even earlier.