Japan struggles to reclaim its position in the financial sector
London and Tokyo’s joint Stock Exchange project, Tokyo AIM,
launched over a year ago and has yet to secure a single listing. This venture was meant to boost Tokyo’s
declining position in the world’s financial market, but has encountered its
share of setbacks. Although Tokyo
AIM expected a slow start in its race to become a premier Asian hub (initially
projecting around five listings for the first year), it certainly did not
foresee having no start at all.
According to the Financial Times, one barrier facing Tokyo
AIM is the difficulty in finding nominated advisors (“nomads”) who have
special knowledge of Japanese markets.
Japan has experienced a drop in listings domestically and a declining
international audience as well. For
example, investors wanting to list in Asia recently have been lured towards other
exchanges such as Hong Kong and Singapore.
In the April issue of Eurobiz magazine, Chairman of EBC
Banking Committee Philippe Avril said; “I think the debate now is more about how
to revitalise Tokyo and how to make sure Tokyo can continue to compete with
markets like Hong Kong, Singapore and, to a lesser extent, Shanghai.” Tokyo currently remains behind Hong Kong and Singapore in
the world's financial centre rankings, according to the City of London Corporation’s Global Financial Centres Index.
Japan's soaring corporate
tax rates and high operating expenses have also turned away investors in the past. Pete Millet, director of People
Services International, told Eurobiz that “The
language barrier, strict visa policies, small apartments, excessive red tape,
high taxes, and declining importance of the market globally are some core
issues that currently make Japan less attractive than Singapore or Hong Kong to
many foreign bank employees.”
There are some who have a more positive outlook on the desperate situation. Tetsutaro Muraki, Tokyo
AIM’S president and CEO, told Eurobiz magazine he was optimistic that Japan could
eventually regain its position as a premier Asian hub.
Links:
Eurobiz April article
Tokyo AIM
Global Financial Centres Index
Financial Times story