London Stock Exchange Group plc and Tokyo Stock Exchange Group, Inc. are to establish a new market for emerging companies.
The market will be operated as a joint venture on an equal basis, and will build on the London Stock Exchange’s success in creating and developing a market structure designed for smaller companies through AIM, and the Tokyo Stock Exchange’s local expertise and infrastructure.
The market will be a new risk capital market for companies and investors from Japan and elsewhere in Asia. It should create new investment opportunities for sophisticated investors, and provide a new funding option for smaller companies which are not yet sufficiently developed for existing public markets. Historically, these companies have faced a funding gap, with limited access to risk capital resulting in a reliance on personal capital or bank loans.
“The new market will contribute to Japanese economic growth by providing a vibrant risk capital environment for issuers. This will make Tokyo the centre of a new community of Japanese and international investors and intermediaries. We are very pleased to work closely with our partner the LSE, and to benefit from their success in the AIM market. We look forward to working with them to help young, innovative companies access the long-term funding that they need to support future growth,” says Atsushi Saito, CEO, Tokyo Stock Exchange Group, Inc.
“We are very happy to have this important opportunity to work with the Japanese financial community to introduce a market model based on AIM. AIM is already established as the world’s leading growth market, providing smaller companies with long-term institutional investment capital to grow their businesses within an appropriate regulatory framework. Bringing together the Tokyo Stock Exchange’s knowledge of the region and our expertise in the development of growth markets creates a powerful partnership to deliver this exciting new venture,” says Clara Furse, chief executive, London Stock Exchange.
It is believed that the market will be established by the end of 2008, and will be operated by a joint venture company based in Tokyo.