Just what is the TSE (Tokyo Stock Exchange)?
Tokyo is home to Japan’s main stock exchange, the Tokyo Stock Exchange (TSE). On May 15th, 1878, the Tokyo Stock Exchange opened for business.
There were 3,784 businesses listed on the market as of September 14, 2021.
The TSE is operated by the Japan Exchange Group and is home to the most well-known and influential Japanese multinational corporations such as Toyota, Honda, and Mitsubishi.
The TSE also provides detailed market data, including market statistics, real-time index quotes, and details on industry experts.
Keep in mind that the Toronto Stock Exchange (often abbreviated TSX) in Canada is not to be confused with the Tokyo Stock Exchange (abbreviated TSE).
KEY POINTS
- There will be 3,784 companies listed on the Tokyo Stock market (TSE) by September 2021, making it the largest stock market in Japan.
- As the Japanese economy collapsed following the bursting of the country’s stock and real estate bubbles in the 1990s, the TSE saw a severe decline between the years of 1991 and 2001.
- Many of Japan’s top corporations, such as Toyota, Softbank, Keyence Corporation, Sony Corporation, and Chugai Pharmaceutical, are listed on the TSE.
- The “Main Market” and “Tier 1” are the first two segments of the TSE, and they are home to the exchange’s largest and second-largest corporations, respectively.
- Two sections of the TSE are dedicated to new businesses, while the remaining section is open solely to accredited investors.
Learning About the TSE (Tokyo Stock Exchange)
In December 1989, at the height of the Japanese asset price bubble, the Nikkei 225 index hit an all-time high of 38,916.
Over the subsequent two decades, as the Japanese economy struggled in a recessionary climate and the Nikkei plummeted in value, the TSE’s aggregate market capitalization dropped drastically.
Directors Tsuda Hiroki (Chairman of the Board), Kiyota Akira (CEO), Yamaji Hiromi (Chief Operating Officer), Iwanaga Moriyuki (Vice Chairman), and Shizuka Masaki (Vice Chairman) make up the Tokyo Stock Exchange’s Board of Directors as of September 2021.
At the end of July 2021, the five most valuable equities on the Tokyo Stock Exchange were as follows (in one hundred million Japanese yen):
- Toyota Motor Corporation (¥319,936).
- Keyence Corporation (¥147,724).
- Sony Group Corporation (¥143,445).
- SoftBank Group Corp. (¥117,798).
- Recruit Holdings Co. (¥95,465).
Other Major Foreign Exchange Markets
Other significant trading exchanges across the world include the New York Stock Exchange (NYSE), the NASDAQ., and the London Stock Exchange (LSE), in addition to the Tokyo Stock Exchange.
In order to list their securities on a given exchange, issuers must first satisfy the exchange’s individual requirements.
Minimum capital requirements and annual financial reports, including audited financial statements, are two examples of these types of frequent reporting necessities.
For instance, the New York Stock Exchange (NYSE) requires that a corporation have at least 1.1 million publicly traded shares of stock and a stock price of at least $4 per share in order to be listed on the exchange.
A minimum of $10 million in pre-tax income over the past three years is required, with at least $2 million earned in each of the past two years.
To be listed on Nasdaq, a company must have at least $11 million in pre-tax profits over the past three fiscal years and have a minimum bid price of $4.
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Arguments against the TSE (Tokyo Stock Exchange)
In comparison to other worldwide exchanges, the TSE has gotten too big and complex, according to some market participants.
The TSE has five distinct parts. Companies of the largest size in Japan are listed first, followed by those of the medium size.
These two segments make up what are together known as the “main markets.”
Later, you’ll find a double-chunk focused on new ventures. These include the “Mothers” (Market of the High-growing and Emerging Stocks) and the “Jasdaq,” which is further divided into the “standard” and “growth” categories.
The last part of the Tokyo Stock Exchange is the Tokyo Pro Market, which is open only to experienced traders.
To further complicate matters, different requirements for listing exist throughout the various TSE sections.
About 2,190 businesses were part of the first segment as of September 14, 2021, nearly doubling the number from 1990.
Reforms to the TSE would streamline the criteria used to divide the exchange into three segments: Prime, Standard, and Growth.
One alternative is to increase the minimum market capitalization level needed to be included in the top tier.
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