Tokyo AIM became the Tokyo PRO market, and London Stock Exchange quits Japan. Here is why!

Tokyo AIM: LSE sells its share in the Tokyo AIM joint venture to Tokyo Stock Exchange and leaves Japan

Initially, London Stock Exchange and Tokyo Stock Exchange created Tokyo AIM as a joint-venture company in order to create a jointly owned and jointly managed Tokyo AIM, modeled according to the very successful London AIM model.

Nikkei: “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own”

However, on March 26, 2012 NIKKEI reported that “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own. TSE plans to improve the rules of its own new market, so that TSE can create a more welcoming market” (our translation of the original Japanese NIKKEI article to English).

London Stock Exchange withdrew from the venture, and Tokyo Stock Exchange took over 100% of Tokyo AIM. Essentially, London Stock Exchange AIM’s venture into Japan failed, while the stock market created by the venture continues without London Stock Exchange’s involvement. As explained in our blog here, these events are very very similar to what happened with NASDAQ about 10 years earlier!

Tokyo AIM is renamed TOKYO PRO Market and TOKYO PRO BOND Market

In 2012, the name was changed from Tokyo AIM, to TOKYO PRO Market and TOKYO PRO BOND Market. Details can be found here:

Some background about the mistakes which led to the failure of both NASDAQ and London Stock Exchange AIM to build business in Japan can be found here:

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Tokyo AIM stock market rebirth under Tokyo Stock Exchange (TSE) alone?

Tokyo AIM – will it go the same way as NASDAQ-Japan?

Nikkei: “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own”

Tokyo AIM (the stock market joint venture between Tokyo Stock Exchange and London Stock Exchange) seems to be heading along a similar road as NASDAQ-Japan about 10 years earlier, according to an article in NIKKEI this morning (morning edition of March 26, 2012).

Tokyo Stock Exchange plans to create a market more welcoming than Tokyo AIM

Nikkei reports this morning that “Tokyo Stock Exchange has learnt enough from the London Stock Exchange to set up a similar market on its own. TSE plans to improve the rules of its own new market, so that TSE can create a more welcoming market”.

Reminds me of NASDAQ-Japan almost exactly 10 years ago:

At the end of 2002 I met with one of my friends, until a few days earlier CFO of NASDAQ-Japan, which terminated operations in Japan on October 15, 2002. I asked him as many questions as I could to build myself a good picture of why NASDAQ had not been successful in Japan, and why NASDAQ decided to terminate its operations in Japan. (After our conversation he offered my small company the used office furniture of NASDAQ-Japan at a good price, had I accepted this offer, my company’s people would all be sitting on x-NASDAQ-Japan chairs and desks…)

NASDAQ initially entered Japan in a joint-venture with Softbank

NASDAQ initially entered Japan in a joint-venture with Softbank, and built the NASDAQ-Japan stock exchange in cooperation with the Osaka Stock Exchange (OSE). When NASDAQ decided to terminate operations in Japan in October 2002, about 100 companies were listed on NASDAQ-Japan.

NASDAQ quit Japan, and NASAQ-Japan became the HERCULES Stock Market

The stock market built up by NASDAQ in Japan became HERCULES (full name: Nippon New Market Hercules) when NASDAQ exited Japan, and in December 2008 Osaka Stock Exchange acquired JASDAQ, and October 12, 2010 Hercules, JASDAQ and NEO were merged to form New-JASDAQ. This year, 2012, there were 7 IPOs on the New-JASDAQ, and about 1000 companies are currently traded on New-JASDAQ.

Interesting to see that NASDAQ-Japan’s market and probably also the market to evolve now from TOKYO-AIM are success stories from the OSE and the TSE points of view, while NASDAQ and now apparently London-Stock-Exchange AIM withdrew from Japan.

Lots to learn here for foreign companies with complex high-tech businesses such as stock exchanges entering and building business in Japan.

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