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Japan FTC launches probe into IPO pricing

  • August 12, 2021
  • , Jiji Press , 12:13 p.m.
  • English Press

Tokyo, Aug. 12 (Jiji Press)–Japan’s Fair Trade Commission has launched an investigation to see whether stocks of Japanese companies are priced fairly in their initial public offerings.

 

It has been noted that IPO prices, set in negotiations with securities houses and others before exchange listings, tend to be far lower than the initial prices at which the stocks are traded in the market, indicating that companies have to settle for a smaller amount of capital than they actually can raise.

 

Earlier this month, the antimonopoly watchdog sent a questionnaire to domestic companies that have recently carried out IPOs to ask about pricing procedures and whether they were able to raise the intended amounts of funds, sources familiar with the matter said Wednesday.

 

The FTC is also considering interviewing securities firms, according to the sources.

 

It plans to cooperate with the Financial Services Agency to understand the whole picture and examine whether there are any problems from the standpoint of the antimonopoly law and competition policy.

 

Japan has been falling behind European countries and the United States in nurturing so-called unicorns, or major startups valued at 1 billion dollars or higher.

 

“Companies are not able to raise enough funds, with their IPO prices set unreasonably low,” a senior official of an economy-related government agency said.

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