Japan's securities industry group to review IPO price-setting process
15/09/2021 08:56
TOKYO, Sept 15 (Reuters) - A Japanese brokerage industry
group said on Wednesday it would review the process for setting
the price of initial public offerings (IPO), responding to
criticism from startups that IPO prices have often been too low
and surged on market debuts.
The Japan Securities Dealers Association said it would set
up a panel consisting of scholars, investors and executives from
major brokerage houses and startups this month to review the
process.
On the Tokyo bourse's Mothers market for start-ups, it is
common to see wide gaps between IPO prices and prices fetched on
debut, which some startups blame on brokerage houses setting IPO
prices excessively low.
Brokerage houses say the wide gaps as a result of high
volatility in the Mothers market, where share prices of firms
with very small market capitalisations tend to swing wildly.
"We hope to examine the process from various perspectives,"
Toshio Morita, chief executive of the industry group and the
former head of Nomura Holdings' 8604.T main securities arm,
told a news conference.
He said prices on a firm's market debut were bound to surge
due to tight supply, although he said the process had not been
reviewed extensively and more flexibility could be introduced.
(Reporting by Makiko Yamazaki; Editing by Edmund Blair)
((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))