Initial public offerings in Japan may keep attracting buyers after having delivered the biggest gains among newly listed Asian shares this year in the world¡¯s best-performing equity market.
Tokyo¡¯s debutants in 2023 are up an average of 75% since their listings, according to data compiled by Bloomberg. That¡¯s more than any other major Asian market that had at least $1 billion raised through IPOs over the period.
Looking at the first day of trade alone, newcomers in the city rose 51% on average, the most in five years, the data shows.
¡°The Japanese IPO market is running red hot,¡± said Clarence Chu, an analyst at Aequitas Research in Singapore. ¡°Fundamentals aside, this is likely owed to the ¡®buy Japan¡¯ investment angle that is ongoing right now, with investors looking at the country as an attractive geography to risk on.¡±
Japan¡¯s top performance comes as the nation boasts a stock market that has soared to levels unseen in more than three decades, amid inflows from overseas investors bullish because of a weak yen, reforms in corporate governance and the Bank of Japan¡¯s easy monetary policy. The exchange has been trying to get more companies to list domestically.
The two largest listings for Japan this year ¡ª Rakuten Bank at ?97.6 billion ($676 million) and SBI Sumishin Net Bank at ?60.8 billion ¡ª are both up more than 30% since IPO prices were set in April and March, respectively, amid the global banking crisis.
¡°The IPO of SBI Sumishin resulted in a happy outcome for shareholders,¡± said Teruhiko Nishimura, a portfolio manager at Gordian Capital Japan in Tokyo. This year¡¯s debuts have valuations that are easy to explain, he added.
The other 44 stocks that listed in Tokyo this year had offerings smaller than $100 million. Newcomer Ispace, a spacecraft developer, saw its shares soar about 500% from its IPO price in April ¡ª even after a highly-anticipated moon landing mission failed.
¡°With a number of successful listings in Japan, some investors could also be running with a ¡®FOMO¡¯ attitude, looking to catch the next listing pop,¡± Aequitas Research¡¯s Chu said.
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