Japan’s IPOs to Jump 67% on Abenomics Rally, Adachi Says

Initial public offerings in Japan may jump 67 percent this year as Prime Minister Shinzo Abe’s policies boost stock prices and make it easier to sell shares, according to the Japan Venture Capital Association.

New listings may rise to 80 this year from 48 in 2012, association chairman Toshihisa Adachi said. Information technology, social networking and gaming firms will make up most of the offerings, he said, without naming specific companies.

Broadleaf Co., a software developer, and Water Direct Corp. (2588), a drinking water delivery service, are among 10 companies scheduled to list in the next month amid a share rally that has boosted the Nikkei 225 Stock Average 38 percent since the end of October. IPOs have increased every year since 2009, when they fell below 20 to the lowest in at least 15 years amid the financial crisis, according to data compiled by Bloomberg.

“Japan’s strong equity market, boosted by optimism surrounding Abenomics, is definitely having a huge impact on the IPO market,” said Adachi in an interview. “In the past three to four years, companies with potential were largely undervalued by the market due to the tough environment.”

Fourteen companies announced IPOs this year through yesterday in Japan including Kyoritsu Computer & Communications Co., a system solution provider, and drugmaker Medrx Co. Shares have rallied amid optimism Abe will take steps to end deflation.

Eight IPOs have been announced this year in Hong Kong and 79 in the U.S.

Softmax Listed

Softmax Co. (3671), a system software provider, was listed on the Tokyo Stock Exchange’s Mothers market today. It was untraded and poised to rise as buy orders outnumbered sell orders. The stock was bid at 2,600 yen as of 1:29 p.m. today, compared with its IPO price of 1,300 yen.

Adachi is also chief executive officer of Itochu Technology Ventures Inc., an arm of Japan’s third-largest trading house that bought shares in Start Today Co. and online brokerage Kabu.Com Securities Co. before they went public. The venture capital firm has invested in 57 companies, according to its website.

The Japan Venture Capital Association promotes start-ups through research, seminars, and collaboration with stock exchanges and government organizations, its website says.

“The pipeline is continuing to increase, as if a levee broke,” Adachi said. “In two to three years, the number of IPOs will probably recover to about 100.”

To contact the reporters on this story: Satoshi Kawano in 東京 at skawano1@bloomberg.net; 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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Japan’s IPOs to Jump 67% on Abe, Venture Capital’s Adachi Says

Tomohiro Ohsumi/Bloomberg

Pedestrians cross a road in front of an electronic stock board outside a securities firm in Tokyo.

Pedestrians cross a road in front of an electronic stock board outside a securities firm in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

9:12

March 12 (Bloomberg) -- Bill Blain, a strategist at Mint Partners Ltd., talks about the euro-zone economy, Japanese equities and U.S. credit markets. He also speaks about Italian and Spanish bonds with Mark Barton and Caroline Hyde on Bloomberg Television's "Countdown." (Source: Bloomberg)

Enlarge image

Japan’s IPOs to Jump 67% on Abe, Venture Capital’s Adachi Says

Tomohiro Ohsumi/Bloomberg

Pedestrians are reflected in a window in front of an electronic stock board outside a securities firm in Tokyo. Fourteen companies announced IPOs this year through yesterday in Japan, eight IPOs have been announced this year in Hong Kong and 79 in the U.S.

Pedestrians are reflected in a window in front of an electronic stock board outside a securities firm in Tokyo. Fourteen companies announced IPOs this year through yesterday in Japan, eight IPOs have been announced this year in Hong Kong and 79 in the U.S. Photographer: Tomohiro Ohsumi/Bloomberg