Japan Exchange Plunges on First Day of TSE Trading: Tokyo Mover

Japan Exchange Group Inc. (8697), created by the merger of Japan’s two biggest bourses, fell in its trading debut on the Tokyo Stock Exchange.

Japan Exchange fell 9.3 percent to 3,900 yen as of 10:44 a.m. in Tokyo from 4,300 yen on Dec. 28 on the Jasdaq market. The shares traded at 3,900 yen on the Jasdaq today. The company formed by the merger between Tokyo Stock Exchange Group Inc. and Osaka Securities Exchange Co. (8967) was previously listed as Osaka Securities on the Jasdaq market, where it gained 5.6 percent the past month. The Topix Index of shares rose 2.5 percent today.

“Investors will probably re-evaluate the stock once they start to see the synergy from the merger,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co., which oversees about $6.3 billion. “Right now there’s not much news to buy on, as the shares already rose a lot on Jasdaq.”

The tie-up is part of a government policy to reinvigorate the country’s financial markets. Japanese stocks are still trading more than 70 percent below a 1989 peak and domestic investors have lost faith in the market after 23 years of losses, corporate governance scandals and deflation.

Japan Exchange Group expects 11 billion yen ($125 million) operating profit and revenue of 62.5 billion yen in the year ending March, according to a Dec. 18 statement issued by Osaka Securities Exchange Inc.

The exchanges announced the listing plan on Oct. 29, and the Financial Services Agency delivered the procedural ruling on Dec. 11.

To contact the reporter on the story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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